Current share price
24/05/2013
255.00
Data is delayed by 15 minutes.
Quotes are in local exchange time.
View LSE chart
Audited Preliminary Results For The Year Ended 31st December 2009
Wednesday, 10 March 2010
Chime Communications PLC, the leading marketing services group, today announces its preliminary results for the year ended 31 December 2009.
Financial Highlights
- Operating income up 10% to £123.1 million (2008: £112.1 million)
- Organic1 growth of 8% - Operating profit2 up 10% to £20.1 million (2008: £18.2 million)
- Organic1 and 2 growth of 7% - Operating profit margin2 16.4% (2008: 16.3%)
- Profit before tax2 and 3 up 14% to £18.8 million (2008: £16.5 million)
- Reported profit before tax up 14% to £18.6 million (2008: £16.3 million)
- Basic earnings per share from continuing operations2 and 3 up 11% to 22.46p (2008: 20.19p)
- Net cash as at 31 December 2009 of £4.8 million (2008: £6.3 million)
- Final dividend of 3.50p per share (2008: 3.18p), an increase of 10%
Corporate Highlights
- Acquisition of Essentially Group completed and Sports Marketing now shown as a separate division
- Acquisition of majority stake in Pelham Public Relations completed
- Acquisition of Tree completed on 10th March 2010
- Placing to raise £4.5 million successfully completed
Note: 1. Organic growth is calculated excluding all acquisitions in 2008 and 2009.
2. Before taking account of amortisation of acquired intangible assets (£0.3 million, 2008: £0.1 million)and costs relating to acquisitions (£0.2 million, 2008: £nil).
3. Before taking account of profit on disposal of a minority of a subsidiary (£1.3 million, 2008: £nil) and write off of investments (£1.0 million, 2008: £nil).
“We outperformed the market and our competitors in 2008 and we have done so again in 2009. These are our best results ever and we are very pleased and delighted. We have made three acquisitions, controlled costs and strengthened our existing business. 2010 has started well and we are cautiously optimistic for the outcome of the full year.”
For further information please contact:
Chime Communications
Christopher Satterthwaite, Chief Executive 020 7861 8515
Chime Communications
Alex Walters/ Victoria Geoghegan 020 7337 1501
Pelham Bell Pottinger
SUMMARY OF RESULTS
|
2009 |
2008 |
% |
|
|
Operating Income |
123.1 |
112.1 |
+10% |
|
Operating Profit2 |
20.1 |
18.2 |
+10% |
|
Operating Profit Margin2 |
16.4% |
16.3%
|
|
|
Organic1 |
|
|
|
|
Operating Income |
120.7 |
112.1 |
+8% |
|
Operating Profit2 |
19.5 |
18.2 |
+7% |
|
|
REVIEW OF OPERATIONS
Overall the Group performed extremely well in 2009. The Group acted for 1,389 clients in 2009 compared to 1,381 in 2008. 230 of these clients used more than one of our businesses (256 in 2008) which represented 70% of total operating income (2008 – 66%).
150 clients paid us over £100,000 in 2009, compared to 170 in 2008. Our top 30 clients represented 57% of total operating income (2008 – 48%).
Our two largest clients represented 22.3% of our operating income (2008 – 18.4%). Both clients have been retained since 2003, are high margin and have normal renewal terms. They are both covered by more than one contract covering the various different services provided to the client so that the ending of one contract would be unlikely to lead to all contracts for the same client coming to an end.
Average fee income per client in 2009 was £89,000 compared to £81,000 in 2008. Average income per employee was £118,000 in 2009 compared to £111,000 in 2008. In 2009, 46% of our income came from overseas work compared to 37% in 2008.
OPERATIONAL HIGHLIGHTS OF THE YEAR
- 54 awards across the Group in 2009, most notably
- VCCP: winner of Marketing’s Creative Agency of the Year, Campaign’s Campaign of the Year and 3 British Television Advertising Awards; Resonate: Gold Cannes Lion; Good Relations: Gold Cannes Lion; Fast Track: Gold at the Sports Event Management Awards; Teamspirit: 2 Golds, 2 Silvers and 2 Bronzes at Money Marketing Awards; BMT: 7 awards at the MAA Globes.
- Bell Pottinger retained its position as No. 1 in the ‘PR Week’ League Table.
- Fast Track remains No. 1 in ‘Marketing’ Sponsorship League Table.
- Emirates’ sponsorship of the Rugby 7’s World Cup in
- The Home Office’s Alcohol Awareness campaign.
- The Government’s Sexual Health campaign.
- Winning consultancy work for four 2012 Olympic Games partners.
- VCCP Health’s appointment as a roster agency for Merck Sharp and Dohme.
- The winning presidential election campaign in
- Winning Nokia’s public relations.
- Winning npower.
- Promoting the economic profile of
- The Department of Health’s organ donation campaign.
- Winning Alibaba.com in Ptarmigan
- Winning the search marketing for Virgin Money, Sage and Hiscox.
- Winning O2 in the
- Winning Coca-Cola Enterprises corporate public relations.
- Developing the Hepatitis C campaign for the Department of Health.
- Launching Legal and General’s new campaign.
- Enabling Texaco to become an official partner of the Football League.
- Launching Mubadala’s Formula 1 website.
- Announcing Duchy Originals’ exclusive deal with Waitrose.
- Promoting
- Welcoming Michael Edge as Head of Digital at VCCP from AKQA.
- Welcoming former member of Shadow Cabinet Tim Collins as Managing Director of Bell Pottinger Public Affairs.
DIVISIONAL PERFORMANCE
2009 was a good year for the Public Relations Division, the Advertising and Marketing Services and the Sports Marketing Divisions, but a disappointing one for our Research Division.
Public relations continues to be our largest division being 54% of operating income (2008 – 55%), Advertising and Marketing Services was 27% (2008 – 27%), Sports Marketing was 14% (2008 – 12%) and Research 5% (2008 – 6%). The full year impact of the Essentially acquisition should mean that Sports Marketing should be about 20% of Group operating income in 2010.
Public Relations – Bell Pottinger Group including Good Relations, Harvard and Insight
|
2009 |
2008 |
% |
|
|
|
|
|
|
|
Operating Income |
66.8 |
61.3 |
+9% |
|
Operating Profit |
13.9 |
12.1 |
+15% |
|
Operating Profit Margin |
20.8% |
19.7% |
|
Overall the division showed good revenue growth with strong cost control which resulted in an improved margin. Some businesses were affected by the downturn but this was more than offset by other businesses performing beyond our expectations, notably our geopolitical business, Corporate Citizenship and Good Relations.
Advertising and Marketing Services – VCCP Group and Teamspirit
|
|
2009 |
2008 |
% |
|
|
|
|
|
|
Operating Income |
33.3 |
30.2 |
+10% |
|
Operating Profit |
4.0 |
3.5 |
+14% |
|
Operating Profit Margin |
12.0% |
11.6% |
|
Operating income continued to grow whilst costs have grown at a slower rate leading to an improvement in operating profit margin. We believe this trend can continue.
There was a strong performance from VCCP both in the
Sports Marketing – Fast Track and Essentially
|
|
2009 |
2008 |
% |
|
|
|
|
|
|
Operating Income |
17.2 |
13.6 |
+26% |
|
Operating Profit2 |
3.5 |
2.8 |
+27% |
|
Operating Profit Margin |
20.6% |
20.5% |
|
The 2009 results include two months of the acquisition of Essentially and a full year of Fast Track. 2008 relates only to Fast Track. The integration of Fast Track and Essentially is going well and both businesses have continued to grow. The Fast Track business in the
These are high margin businesses in a marketplace that we believe will continue to grow despite the economic uncertainty.
Note: 2. Before taking account of amortisation of acquired intangible assets (£0.3 million, 2008: £0.1 million)and costs relating to acquisitions (£0.2 million, 2008: £nil).
Research – The Research Group
|
2009 |
2008 |
% |
|
|
|
|
|
|
|
Operating Income |
5.8 |
7.0 |
-17% |
|
Operating (Loss)/Profit |
(0.2) |
0.4 |
- |
|
Operating Profit Margin |
- |
5.4% |
|
The Research Division remains very disappointing. The marketplace has been affected by the economic downturn but our businesses have also underperformed.
Within the division Facts International has performed very well and we are using that business and its management as a basis for restructuring the whole division.
The acquisition of Tree will provide additional opportunities for growth and we expect the division as a whole to show a profit in the first six months of the year and continue to grow thereafter.
CASH FLOW AND BANKING ARRANGEMENTS
Net cash at 31st December 2009 was £4.8 million compared to £6.3 million at 31st December 2008.
The Group continued to generate cash in 2009 with cash from operating activities of £10.4 million (2008 - £21.3 million).
The Group continues to operate well within its banking covenants and retains its borrowing facility of £32 million which continues until July 2013.
DEFERRED CONSIDERATIONS
Deferred considerations still payable total a maximum of £37.1 million, comprising £18.4 million payable in cash and £18.7 million payable in shares or cash at Chime’s discretion. The timing of these payments is £11.1 million in 2010, £2.1 million in 2011, £5.5 million in 2012 with the balance payable in 2013 and 2014.
TAXATION
The effective tax rate for 2009 was 31.6% compared to 31.6% last year.
CORPORATE ACTIVITY
We have today completed the acquisition of Tree (
During 2009 we acquired the sports marketing business, Essentially, and we merged Pelham Public Relations, a financial public relations business, with our existing Bell Pottinger Corporate and Financial business.
These three businesses will enhance the range of services we can offer to our clients and will give us additional opportunities for growth in 2010 and beyond.
DIVIDENDS
The Board is proposing to pay a final dividend of 3.50p per share (2008 – 3.18p), giving a total dividend per share of 5.10p compared to 4.72p in 2008, this is an increase of 8.1%. The final dividend will be payable on 18th June 2010 to shareholders on the register at 28th May 2010. The expected ex-dividend date is 26th May 2010.
CORPORATE AND SOCIAL RESPONSIBILITY
The Group continues to be carbon neutral and reduced its carbon footprint by 42% in 2007 and 2008. We are expecting to have reduced it by a further 5% during 2009. We continue to consider and enhance the environmental impact of our businesses and are working closely with our major suppliers to ensure best practice is embedded in our wider operations. We continue to be included in the FTSE4Good and have been re-accredited with a Big Tick by Business in the Community for our work on climate change.
OUTLOOK
Part of our 2009 strategy was to strengthen our existing business ready for any upturn in the 2010 market. We believe this strategy will be beneficial for 2010. Highlights are:
- We have considerably improved our financial public relations offering through the merger with Pelham. In the first quarter this business has increased its income and its new business conversion has been very good.
- Our public affairs business has had a record start to the year following the appointment of Tim Collins as Managing Director to work alongside
- The whole Public Relations Group has been strengthened by the promotion of
- We acquired Essentially which is now being integrated with Fast Track. This year’s results show the Sports Marketing Division separate from the Advertising and Marketing Service Division in order to highlight its growth potential for 2010.
- The management of our Research Division has been changed. We have appointed Crispin Beale as Chief Executive. Crispin, together with his Chairman
- We have completed the acquisition of Tree which will become part of the Research Division and will supply our clients with a service not previously available within the Group.
- Following winning Marketing Magazine’s agency of the year and Campaign magazine’s ‘campaign’ of the year, VCCP is receiving a record number of new business opportunities. VCCP has won TCP, Jungle Formula and Gatwick Express already this year and has opened an office in the
- We will continue our policy of controlling our costs, increasing the proportion of our costs that are variable and we are targeting an improvement in our margin .
- We will continue our policy of considering earnings enhancing acquisitions that expand our range of services and starting up new businesses to service our existing client list.
- We are well funded and continue to be very cash generative.
All in all we are cautiously optimistic for the outcome of 2010.
Chairman
10th March 2010
