Interim Management Statement

RNS Number : 3002K

Creston PLC

29 July 2013

 



29 July 2013

Creston plc

Interim Management Statement

Creston plc ('Creston' or the 'Group') (LSE: CRE), the digitally focused insight and communications group, announces its interim management statement for the period 1 April 2013 to date.

Trading update

In the three months to 30 June 2013 (the 'Period'), as expected, revenue is slightly lower than last year with like-for-like revenue 5 per cent lower largely due to the previously announced loss of a client in the Health division. New business activity, however, is currently ahead of expectations and we are encouraged by the potential for this to positively impact revenue in the remainder of the year.

Communications

The division's revenue is broadly flat compared with the same period last year. Alongside normal new business activity, there has been substantial time spent on pitching for ten different contracts for the Government Procurement Service. Of these the division has already been awarded a contract for integrated marketing services, which is one of only two such contracts commissioned so far by the Government in its main roster, and we anticipate hearing news of the other pitches in the coming weeks. In the Period, the division has been appointed by Reckitt Benckiser to manage digital activity across its UK brands, by Bentley to manage its events marketing activity, by Sony to manage public relations across its PlayStation brands and the launch of the PlayStation 4, and has also been appointed by Sainsbury's to its digital roster. The full revenue upside from the addition of these new clients will benefit the Group this year.

Health

Revenue growth from the Group's UK companies is continuing to replace revenue from Cooney/Waters' contract with Sanofi Pasteur, which came to an end in FY13. The division has reported the expected decline in like-for-like revenue during the first three months compared with the same period last year. With recent joint agency pitches and wins, such as the previously announced global appointment by Gilead Sciences, and international public relations contracts for clients Novartis and Takeda in the Period, the division is well-placed to take advantage of developments in the sector going forward and in particular the increasing demand for digital expertise.

Insight

The division has reported an increase in like-for-like revenue compared with the same period last year, highlighting the continued recovery and growth of the division. This has been driven by the additional revenue generated from using innovative research technologies and digital platforms for data collection.

Outlook

Although we remain cautious given the potential impact of on-going market volatility on our clients, the Board is pleased with the continuing level of client demand for the digital capabilities of the Group and the increasing focus on cross-agency pitches. We are encouraged by the recent new business wins and are confident that these, added to the continuing high level of new business pitch activity during the Period, will enable the Group to meet the Board's expectations for the full year.

Don Elgie, Group Chief Executive of Creston plc, said, "The IPA Bellwether Report on client sentiment towards increased marketing spend is the most encouraging for six years. At Creston we are seeing this being borne out by high levels of new business activity and while opportunities must always be converted, the level of pitching we are seeing is the highest I can remember. Based on our historic pitch to win ratio, we are confident that this will lead to further underlying growth in our client base."

For further information please contact:

Creston plc	+ 44 (0)20 7930 9757
Don Elgie, Group Chief Executive
Barrie Brien, COO/CFO
Pelham Bell Pottinger	[phone]
David Rydell/Elly Williamson/                   Malika Shermatova

About Creston plc

Creston plc (LSE: CRE) is a digitally focused insight and communications group. The Group delivers a range of marketing services, including advertising, brand consultancy, CRM, digital and direct marketing, health communications, local marketing, market research, PR and social media marketing to a broad spectrum of blue-chip global clients. Our insight companies give us a real edge, providing the analytic intelligence to enable us to deliver original thinking that engages audiences, invites participation and influences future trends. www.creston.com

 

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