Toluna US Buy Leads to Flat Pre-tax Profit

For the first half of the year, European panels and software firm Toluna has posted a flat pre-tax profit of £1.39m, despite revenue growth of 36% to £8.2m million and organic revenue up 32%.

The firm said flat pre-tax profit (last year the figure was £1.38m) resulted from its decision to make a 'significant one-off investment' in North America through its acquisition of US agency Common Knowledge, incurring increased third party panel costs, and strengthening the management team globally.

For the period, European revenue grew by 28%, while US revenue grew 43%, prior to the acquisition of Common Knowledge on 18 June 2008. Between that date and 30 June, Common Knowledge generated a profit before tax of £86k. Had the acquisition occurred on 1 January, the turnover of the enlarged group would have been £11.27m and the profit before tax would have been nearly £1.7m.

Chairman George Kynoch said that while the condition of the global economy worsened during the first half of 2008, the market research sector continues to grow steadily.

'The trend towards consolidation among research agencies has increased, reinforcing the need for global panel coverage and accelerating both the shift online and the adoption of on-demand data collection,' he commented. 'The Board believes that we are at the forefront of the rapidly changing market with our initiative to establish the first social voting community through Toluna.com.'

Since its initial launch in the UK last October, the firm has rolled out this community model in France, Germany and Spain, and it is currently extending the model to its other community web sites.

Kynoch reports that the group's headcount had risen to 169 as at 30 June 2008 (from 122 at 30 June 2007), and that the acquisition of Common Knowledge had increased the headcount by a further 63. He added that the firm has strengthened its finance, administration and HR teams 'to prepare for further growth'.

'Trading in our second half has to date been strong, with operating profits for July and August more than double the equivalent period last year,' added Kynoch. 'Although the global economy remains unstable and exceptionally challenging, subject to unforeseen circumstances, we are confident of the outlook for the remainder of 2008.'

For the period, earnings per share increased by 7% from 2.51p to 2.69p, and consequently the Board is to pay an interim dividend of 0.5 pence per share (2007: 0.37 pence per share). 

The firm, which offers online data collection services covering 30 countries, with access to 2.4 million panel members, has sales and delivery teams in Paris, London, Frankfurt, Amsterdam, New York, Seattle, Dallas and Sydney.

In July, Toluna was named the fastest growing company in France by the publication 'L'Entreprise'.

Web site: www.toluna.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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