Chime Communications, a market services group, presented a decent set of results, but investors were evidently disappointed to see a drop in PR income, as shares lost 1.75 percent in morning trading.
Profit before tax rose from £21.24m to £24.7m, on revenues of £325.9m compared to £299.8m.
PR operating income, which represented 42% of operating income in 2011 (49% in 2010) dropped 7% on a life-for-like (LFL) basis to £69.2m. Operating profit lost 1% to £17.5m, while the operating margin rose from 24.1% to 25.2%. The firm said it is considering selling part of this division, which represents less than 10% of group profit.
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The Advertising and Marketing Services division performed better, with revenue representing 28% (2010: 26%), Sports Marketing up at 25% (2010: 20%) and Insight and Engagement at 5% (2010: 5%).
Chairman Lord Bell said: "in 2011 Chime has had its seventh successive year of growth in operating income, operating profit and margin. We think this is an impressive achievement given the difficult economic conditions in 2011. The group is well positioned for the future, with a very positive year ahead for Sports Marketing in particular. We are making four earnings enhancing acquisitions which will continue to strengthen our offering in growth markets."
Net cash at December 31st was £3.3m compared to £6.9m in 2010.
The firm also announced that it has made four acquistions, namely 100% of McKenzie Clark, a 60% interest in Rough Hill and a 40% interest in StratAgile. It also entered into a conditional agreement to acquire iLUKA.
McKenzie Clark was purchased for £0.6m in cash with further payments of deferred consideration totalling a maximum of £3.4m which may be payable depending upon the future trading performance of McKenzie Clark. Rough Hill was bought for £0.48m and the issue of 83,618 new ordinary shares in Chime and £180,000 in cash representing working capital of Rough Hill that is surplus to requirements after Rough Hill joins the group. The StratAgile stake cost the firm £190,000 in cash with a possible further consideration of up to £210,000, while iLUKA would cost the company an initial consideration of £4m and the issue of 555,361 shares in Chime.
The share price fell 1.75% to 224.00p by 13:08pm.
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