Operating profit for the year ending December 31 2002 was 拢8.4m, down 52.5% from 2001, while the company recorded an operating loss after exceptional charges, goodwill amortisation and impairment charges of 拢38.7m, compared with a profit of 拢10.7m in 2001.
Chime had warned in November that it was not going to meet analyst forecasts for the year. At the same time, it said that it had breached banking agreements. In today's announcement, Chime said that it has now entered into a new three-year facility with the Royal Bank of Scotland -- news that should please the market.
Lord Bell, chairman of Chime Communications, did not try to put a positive spin on the results. He said: "After eight very successful years, we have had a very poor year with operating profits down by 50%. Our market has been in reverse for 18 months and the effect has been very marked.
"However, I am pleased we have reached a good new agreement with our bank. The market seems to have bottomed out. We must now wait for a return to growth and meanwhile strive to increase our market share."
In its results statement, Chime has blamed budget cuts, cancellation of projects and clients switching from retainer relationships to project-based ones for the fall in operating profits.
The troubled communications group confirmed that it would not be paying a final dividend, because of insufficient reserves and its current debt levels.
Exceptional costs included 拢7.3m on redundancies, 拢4.1m reducing its office space and 拢1.2m over the review of its banking agreements.
Profit at Chime's advertising arm fell from 拢7.3m to 拢2.7m, in a year that saw the group sell 49% of its stake in HHCL & Partners to WPP Group for 拢3.5m. In the PR division, which includes Bell Pottinger Public Relations and Harvard Health, profit was down almost half, from 拢7m in 2001 to 拢3.7m in 2002. High-tech profits were also wiped out at just 拢700,000, compared with the previous year's figure of 拢2.8m.
Looking ahead, the company said: "The first quarter of 2003 appears to be no worse than the last quarter of 2002 and we think this may be an indication that the declines in operating income experienced in the second half of 2001 and throughout 2002 have now stopped. However, there are no signs so far that anything is getting much better.
"Some of our businesses are growing -- particularly those in research, consumer public relations and public affairs, but overall performance appears to be flat. We continue to bear down very heavily on costs."
Chime's share price remained steady when the market opened, at 10.5p.
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