Restructured marketing communications group Media Square (LON:MSQ) reported an operating loss after exceptional items of £19.1m for the year to end-February, against a 2009 restated profit of £4.5m. The figure included a £15.9m write-down of goodwill plus redundancy and restructuring costs. Exceptionals totalled £17.7m, previously £2.8m. Revenues at the group came in at £47.3m compared with a restated £61.2m, representing a 23% fall on a like-for-like basis. as a result, pre-tax losses cam in at £20.9m, against a previous £1.1m profit.
Media Square said the figures were mostly a reflection of the general reduction in marketing budgets brought about by the recession. It was also partly due to underperformance by a number of the group's agencies which resigned unprofitable accounts and partly the disposal of non-core agencies.
Chairman Roger Parry said the group's structural turnaround had now been completed. "The company is now smaller, simpler and stable. The results reflect the challenges of restructuring an already weak business against the backdrop of the credit crunch. Although it is early days, the months of March and April have produced extremely encouraging trading results. Operating expenses were reduced by more than £10m in the year and further cost reductions were expected to come into effect in the coming months."
The company said the second half showed a significantly improved performance with profit in the six-month period of £0.4m. As a result, the company's share price climbed by 5% to 10p.
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