Baroness Thatcher’s erstwhile favourite adman, Lord Tim Bell, expects his advertising and public relations group Chime Communications to maintain last year’s double digit growth through the current fiscal to December 30.
Performance for the year overall will be buoyed by a strong first half and despite adverse market conditions H2 will still be in line with 2000. This stable performance was largely due to the axing of 15% of Chime’s one thousand staff and a reduction of 24% in its occupied office space, together lopping £2.7 million from this year's outgoings.
But this produces the downside of one-off exceptional costs arising from the cutbacks, driving up restructuring expenses from £2m to £6m – although £10m will be eventually excised from Chime’s cost base.
Conceding that “the performance of our advertising businesses has been variable”, a group spokesperson revealed that flagship agency HHCL & Partners had dropped two major accounts – the Automobile Association and Prudential-owned internet bank Egg.
However, the losses had been partly replaced by two slices of new business from Bird’s Eye Foods and Mars. The economic chill had also adversely affected Chime’s financial public relations agencies and technology unit, Chime Online.
Summarised Chime: “For the year to 31 December 2001, we anticipate one per cent organic growth in operating profit before exceptional costs and further improvement in our operating margin.”
News source: Financial Times