LONDON — Despite overall gains during the last six months, Huntsworth on Tuesday reported a 5.4% year-over-year decline in its communications revenue during the six months ending June 30.

The communications division, which includes Grayling, Red and specialist financial agency Citigate Dewe Rogerson, reported revenues of £36.6m (2017: £38.3m), a decline of 5.4% on a like-for-like basis, and operating profit of £2.7m (2017: £5.5m), an improvement of 7.4% on a like-for-like basis.

The report reflects the challenges shown in Huntsworth's earnings for all of 2017 (albeit with slight improvement), during which comms revenues fell by 7%. That year followed an even more difficult 2016, during which Huntsworth was hit financially by closing loss making practices in Grayling.

In announcing the results, Huntsworth said the dip in comms revenues was in line with that strategy.

"As previously outlined, we have continued to focus on rightsizing the operations within the communications division which led to a natural revenue decline of 5.4%, and we are now seeing improvements in a number of agencies led by Graying UK and Citigate Dewe Rogerson UK and Asia. We have continued to account for a number of restructuring costs within our operating profit which should lead to a stronger performance in the second half of the year and beyond," the company said.

Grayling revenues fell by 7% on a like-for-like basis, to £19.1 million, resulting in a loss for the period of £0.3 million (H1 2017: profit of £0.4 million). This performance is largely the result of a decline in profitability in Grayling Europe, one-off contract profits in the Middle East last year, and a number of restructuring costs of c. £0.4 million accounted for in the period, which offset improvements in profitability in the UK and the USA. Action has been taken in Europe and we anticipate the second half of the year to be significantly more profitable than the same period in 2017, Huntsworth said.

Red’s revenue declined by 6% on a like-for-like basis in the period, which was expected following the loss via a procurement-led process of its largest client (Boots) in 2H 2017, Huntsworth said. Citigate Dewe Rogerson has "performed well" during the period with revenues broadly flat to the prior period at £10.7 million but profitability sharply improving by 26% to £1.7 million, according to the report.

Overall, however, the year was up for Huntsworth, which reported revenue growth 8% to £102.2m and headline profit before tax growth of 9% to £11m. On a like-for-like basis, that represents growth of 4% and 2,% respectively.

CEO Paul Taaffe credits the larger growth to the company's streamling, which included an increased focus on healthcare services. Huntsworth bolstered its healthcare offering earlier this month with its acquisition of San Francisco agency Giant Creative Strategy.

Huntsworth now has two distinct areas of focus: healthcare, which is made up of medical, marketing and immersive divisions; and communications.

“Huntsworth has made strong progress in positioning itself within the healthcare market and meeting the changing needs of clients following the successful acquisition of Giant Creative Strategy LLC, as well as the integration of The Creative Engagement Group and AboveNation Media LLC and further investments in all the Healthcare divisions," Taaffe said. "Amid tough comparatives, the Group has performed well with strong growth in headline profit before tax. We are well positioned for further growth in the second half and into 2019.”