Chime on acquisition trail after posting record profits

LONDON - Marketing services group Chime Communications, which owns ad agency VCCP, has notched up record first-half pre-tax profits of 拢8.5m due to the strength of its PR agencies.

In an upbeat though still "cautiously optimistic" results summary, the company said it was in a position to make "some strategic acquisitions ready for a possible upturn".

Operating profits growth came entirely from its PR division, which includes Bell Pottinger and Good Relations, up 25% to £6.7m, while its advertising and marketing services division suffered a 4% drop to £3.4m.

However, each division grew its operating income by 10%, and Chime claimed it was hitting a sweet spot in client demand for reputation management and digital work.

It pointed to its small cost base relative to the big four marketing services groups -- WPP, Omnicom Publicis, Interpublic -- and warned them "big is not as beautiful or as safe as it once was".

Chime said: "It appears that this year being a one stop shop, integrated and diversified, channel neutral and low cost is the new black."

The company, which is chaired by Lord Bell, grew revenues by 7% to £58.4m, comparing well to the revenue declines being suffered by many other groups.

Analysts were bullish, with Evo Securities praising Chime for "gliding effortlessly through the carnage" in the sector and Numis saying "the smaller agencies are materially undervalued as recovery plays."

Chime's share price, which has already quadrupled since its low of 40p in February, rose 1.2% to 171p by 9.30am today.

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