Chime profits fall on HHCL account losses

LONDON - Chime Communications has seen profits fall by 42% to £5.2m for the first half of the year, as it is hit by account losses at HHCL & Partners.

Operating income at Chime, which also owns the ad agency Roose as well as the public relations networks Bell Pottinger and Good Relations, fell by 25% to £38.1m, but the falls were largely in line with market expectations. The company said that it expects the second half of the year to be stronger.

Chime attributed the fall in profits to the loss of major accounts in 2001 by HHCL, including those of Egg and Tango. It said that the downturn in advertising affected Roose, and problems in the high-tech market saw income fall at Chime Online.

The group's financial PR agencies Bell Pottinger Financial and Smithfield Financial have both been hit by the fall in merger and acquisition activity this year, although Bell Pottinger Public Affairs has managed to increase profits by £500,000.

Lord Bell, chairman of Chime, said: "Our trading results are in line with expectations and are a reflection of the very difficult trading conditions experienced by us and all our competitors. We believe the downturn has bottomed out and we expect the second half of 2002 to be better than the first half of 2002."

He added: "The evidence is that for us the worst should be over. However, the volatility of the stock market and the political risk of military conflict are still present."

Shares in Chime remained steady at 53.5p when the market opened this morning.

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