Chime chipper despite challenging start - UPDATE

Advertising and sports marketing group Chime Communications admitted 2013 was proving 'challenging' but said it was optimistic about potential new business.

Chime added that income to date in 2013 was lower than the level achieved in 2012 but stressed that the current year's income would be weighted to the second half and that it already had booked more than 75% of the year's income already.

Moreover, management were "encouraged by the new business opportunities so far in 2013" and said growth prospects remained strong for the increasingly dominant sports marketing arm.

Comparisons with 2012's Olympics-led year are always going to be tough, and Chime warned that 'odd' years such as 2013 are always weaker than 'even' years for this division, with the Fifa World Cup and the Sochi Winter Olympics providing the main drivers next year.

Client have already been secured in both Russia and Brazil and income from these client wins will reportedly come through in the second half of 2013 and 2014.

Income at the Advertising and Marketing Services unit, which represented close to a third of business last year, was over 10% higher than the same period in 2012, the company said, with margins also improving.

The public relations division, which has been rebranded as the Good Relations Group after the sale of most of the Bell Pottinger businesses last year, also enjoyed 10% higher income as its new strategy takes shape, with a new divisional head arriving soon.

The smaller Healthcare segment has started the year strongly, with income more than doubled year on year, and while Insight and Engagement has been "marginally better" in a challenging market.

Broker Investec noted that Chime has successfully managed its transition to sports marketing, which is "an important international/growth differentiator for Chime against smaller agency peers" with robust industry growth expected.

Analyst Steve Liechti said 2013 "looks more about keeping momentum after a strong 2012, but we see exciting upside in 2014 given big sports event activity.

He expects sports sales to be down overall given tough comparatives, and expects first half sales to be down "double digit" versus forecasts but with 2014 "to be big".

Shares in Chime Communications were up 0.2% at 257.5p at 14:40 on Wednesday.

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