A focus on sports-related marketing has driven up full-year revenues at Chime Communications, offsetting the loss of a major public relations contract with the US government.
In a year featuring the Olympic Games and European football championships, the marketing group has targeted sports advertising and marketing to supplement its income in response to last year’s loss of the US government deal.
“The rest of the public relations division is doing well but inevitably, when you lose a contract of that magnitude, it’s going to have an affect on the figures,” said Chris Satterthwaite, Chime’s chief executive. “Sports marketing now commands such a huge audience globally that it’s able to do things for clients that they previously couldn’t do.”
The parent company of the Bell Pottinger advertising agency reported its seventh successive year of double-digit revenue growth on Wednesday, driven by international expansion into south-east Asia, Latin America and the Middle East.
“The economic climate isn’t that great in Europe,” said Mr Satterthwaite. “But the trick is to be in the right sectors in our marketplace, and we see those as sports marketing, digital and social, and healthcare.”
Public relations is Chime’s largest division, earning 42 per cent of the group’s full-year net income of £163.6m, when PR revenues shrank by 5 per cent year on year to £69.2m and operating profits were flat at £17.5m, for the year ended December.
The rest of Chime is comprised of market research, advertising and sports marketing divisions, which brought in 5 per cent, 28 per cent and 25 per cent of full-year revenues respectively.
Mr Satterthwaite declined to comment on the group’s January announcement that Lord Bell and Piers Pottinger were preparing a management buyout of the public relations agency they founded in the 1980s.
Bell Pottinger recently clashed with Wikipedia, where the online encyclopedia alleged the agency was making anonymous edits to clients’ pages, breaching its rules.
Chime reported pre-tax profit up from £21.2m to £24.7m, from revenues that rose from £299m to £325m. Diluted earnings per share rose from 18.43p to 19.78p, and the company proposed to increase its dividend to 6.58p per share from 6.05p.
Chime expanded its client list from 1,494 in 2010 to 1,815 as of December 31, with 325 of these customers using more than one of its businesses.
“The outlook continues to look positive, with sports marketing and advertising having a good pipeline of activity,” said Richard Nunn at Charles Stanley Securities. “There will be continuing pressure on PR revenues from tightening budgets in the US, but the strength of the group is its breadth in faster-growing sectors.”
Chime shares fell 2.2 per cent to 223p.
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