LONDON — After years of decline, Huntsworth has reported a slight lift in the group's communications revenue during the first half of 2019.

"The group is very pleased to report like-for-like growth in revenue from the communications division for the first time in a number of years. The strategy of eliminating unprofitable client contracts and operations, streamlining infrastructure and investing in quality staff is beginning to be rewarded," the company said in its earnings statement for the six months to June 30.

Overall revenue for the communications group, which includes Grayling, Red and financial agency Citigate Dewe Rogerson, was £36.3 million, representing like-for-like growth of 0.9%, compared to a drop of 5.4% in the first half of 2018. Operating profit of £3.2 million is also ahead of last year , when it stood at £2.7million for the same period, with margins increasing from 7.4% to 8.7%.

Grayling revenues fell by 3.2% on a like-for-like basis, to £17.1 million, resulting in a loss for the period of £0.1 million (2018: loss of £0.3 million). This performance is largely the result of a decline in revenues in the US for clients terminated last year and under-performance in the Middle East.

The UK was the strongest regional performer, with 10.9% like-for-like revenue growth on the back of new business , Huntsworth said. Red’s revenue grew by 1.5% on a like-for-like basis in the period to £8.5 million. Client wins continued to underpin the business and the group anticipates further growth for Red in the second half of the year.

Citigate Dewe Rogerson revenues were up by 7.2% like-for-like to £10.7 million, compared to £9.9 million for the first six months of 2018, and profits were also up. The improved performance was driven by good trading in Asia, especially in Hong Kong and China, along with the UK and France. The Netherlands continues to operate in a difficult market with little transaction and IPO activity. The group expects that the second half of the year may prove softer in the UK, but this is likely to be offset by continued good trading in Asia.

The report were a notably positive turning point for Huntsworth's communications group, which reported a 5.1% year-over-year decline in its communications revenue during 2018 despite overall company gains. Comms revenues were also down in 2017, during which they fell by 7%. That year followed an even more difficult 2016, during which Huntsworth was hit financially by closing loss making practices within Grayling.

The uptick also reflects Huntsworth's broader strategy of restructuring to meet changing client needs, which is primarily focused on building out its healthcare business, made up of medical, marketing and immersive divisions. 

Over the past year or so, Huntsworth has acquired several healthcare marketing firms — Kyne, CC, AboveNation Media, Giant Creative Strategy and Navience Healthcare Solutions.

Overall group revenue for the first half of 2019 was £123.5 million, an increase of 21% on last year, or 3.1% on like-for-like basis, largely due to the contribution from the newly-acquired businesses.

Huntsworth CEO Paul Taaffe said: "The first half of the year has seen the group continue to focus on extending its capabilities to meet its client needs through investment in new staff, offices and two new agencies. With the acquisition of Creativ-Ceutical and KYNE, we have added world-class award-winning agencies which will help us to continue to grow our business."

He added: "The group expects to see a strong performance in the Marketing and Medical divisions in the second half of the year following recent client wins, and this will be further enhanced by the first-time inclusion of KYNE and Creativ-Ceutical. The communications division will continue to show improved revenue and profit performance, although Immersive is expected to be flat against strong comparatives."