Creston Sells Ad Agency, Reports Steady Results

UK-based marketing and communications group Creston has announced revenue down 4% to £80.5m and pre-tax profit down just 3% (at £13.8m), raising its dividend and simultaneously announcing the sale of its ad agency DLKW Group to Interpublic for £28m.

The sale, still subject to shareholder approval, will help to reduce the group's debt, which has already fallen from £40.9m last year to £24.9m by March 2010. The firm's shares rose 2.5% today on the London Stock Exchange.

The modest profit decline takes account of one-time charges of £5.63m, including a goodwill write-off charge of £3.79m. The firm raised its full year dividend 37% to 1.0p per share and said the new fiscal year had started inline with its expectations and ahead of the same period last year. Digital and on-line revenue grew by 6% during the year and now represents 31% of revenue.

CEO Don Elgie said spend from blue chip clients 'has held up strongly and is likely to continue to support performance in the year ahead.' He added: 'We will seek to use our strong financial position to achieve optimal growth by continuing to develop our own capabilities, including the launch of start-ups and by selective international expansion when driven by client demand.'

The firm's insight division, which includes Marketing Sciences and ICM, saw revenues down from £16.68m to £15.96m, but remains a key area for expansion. Today's sale was described by Chairman David Grigson as 'an opportunity to obtain greater exposure to the growth areas within insight and communications' while Elgie said it would 'accelerate our development as a 21st century insight and communications group, able to advise on all the communications challenges clients face across the fast-changing marketing landscape.'

The group is online at www.creston.com .