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Turnover, Profits Tumble at eq
The UK's eq group plc, parent of MR firms Quaestor and Buckingham Research, has reported on 'a difficult year'. Preliminary results for the year ended 31 December 2006 show turnover down 8% to £10.50m and adjusted operating profit down 21% to £1.30m.
In a letter to shareholders, Chairman Brian Heather and Chief Executive Bob Bond put the problems down mainly to 'unanticipated reduction in activity by a number of our key market research clients in the first half of the year' – this was reported in the firm's trading statement on 2 June last year. The letter says that spend by the clients in question has 'now returned to previous historic levels of spend' and that the adjusted operating profit in the six months to 31 December represented 61% (2005: 49%) of the full year figure. To avoid similar problems in future, the firm will look to broaden its customer base and reduce dependence on very large clients.
The group wrote down the value of goodwill from its investment in commercial radio station service provider Broadnet Limited by £1.72m due to consolidation and increased competition in this market. Consequently the results showed an operating loss of £1.03m (2005: £990,000 operating profit) and a loss before tax of £1,47m (2005: profit before tax of £616,000). A basic loss per share of 19.74p was recorded, against 2005 basic earnings per share of 3.65p. No divdend is proposed.
New customers during the period included Microsoft, Cadbury and Ladbrokes. The firm reports a positive start to 2007 with Quaestor creating specialist Financial Services and Media teams and embracing 'new techniques and approaches such as semiotics, blog tracking and ethnography'. Group facility Summit Studios Ltd was acquired in February 2007 for £340,000 in cash.
Following the AGM, Heather will retire as Chairman but remain as a non-executive director. He will be replaced as Chairman by Steve Jones.
eq, which is quoted on AIM, is online at www.eqgroup.co.uk .
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