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Incepta Trading Statement
International marketing and communications group Incepta Group has issued its normal year end trading statement ahead of its preliminary financial results for the year to the end of February 2003 which will be published in early May 2003. In summary, the current economic climate continues to be difficult and the company is not counting on an improvement in market conditions in the near term.
Despite this, the market leading positions enjoyed by the Incepta businesses, combined with proactive management of the cost base during the year, means the company still anticipates delivering double-digit operating margins in the second half of the year (before exceptional items and goodwill amortisation).
The Marketing Services division continues to trade strongly and in line with expectations, demonstrating its resilience and the strength of the brands in this sector. Dynamo, Finex and The RED Consultancy (recent winner of Marketing magazine's 'PR Agency of the Year' award) have continued to perform strongly in the second half of the year. New client wins include Royal Bank of Scotland (Sponsorship), Barclays Bank (Marketing Intelligence) and Premier Brands (Consumer Public Relations).
The financial and corporate public relations businesses continue to be underpinned by their significant retained client base, but the lack of corporate activity has negatively impacted revenues.
The Specialist Advertising division continues to operate in weak markets and, in the second half of the year, has also seen increased weakness in Continental Europe reflecting the economic environment.
Citigate Global Intelligence & Security, the business and competitive intelligence division, has grown its revenues rapidly and ahead of original expectations. This business is anticipated to be profitable on a monthly basis by the beginning of the new financial year and is expected to recoup a substantial part of its start up losses during the new financial year starting next month.
Against this overall backdrop, Incepta has continued to proactively manage the cost base and has initiated programmes which will generate annualised savings of approximately £8 million. These programmes will result in the total exceptional restructuring charge for the year being some £7 million, of which £2 million relates to headcount reductions and £5 million to property and related costs.
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