Lord Bell remains cautious as Chime profits fall 35%

LONDON - Chime Communications has seen profits fall by 35% for the first half of the year and says that conditions in the market are still very testing.

Chime, which sold 49% of its stake in HHCL & Partners to WPP Group in January, said that headline profit on ordinary activities before tax was down to £3m, compared with £4.6m for same period last year.

It said operating income was down by 14% to £26.9m for the six months ending June 30 2003, but that the results were ahead of forecasts.

Lord Bell, chairman of Chime, described conditions as very testing, but said that he was cautious and not gloomy. "I don't think that the things I am seeing will make me say 'a-ha, there's the advertising recovery'," he said.

He said that Chime's PR business was in good shape, but was not set to benefit from the events that other industry leaders, including WPP's Sir Martin Sorrell, are predicting will bring the long-awaited turnaround, namely the 2004 Olympics, the US Presidential elections and the European football championships.

Revenues for company's PR division, which include Bell Pottinger Financial, QBO Bell Pottinger Public Relations and Good Relations, were down by 8.1% to £17m compared with the same period last year, although up from £15.8 on the previous six months. Chime's PR business accounts for 63% of total revenues.

Advertising and marketing services revenues, which include the remaining 51% stake in HHCL, Roose and the Will Pond-Jones Collective, fell by 26.7% to £8.5m.

The sale of the HHCL stake for £3.5m resulted in a loss of £8.3m, which the company said was the difference between the value of the sale minus the net book value of the company and 49% of the original goodwill from the acquisition of the company.

Shares in Chime were trading at 32.5p this morning, down by 4p, or 11.03%, on the opening price.

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