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Photon Update Offers Reassurance
Restructuring Australian-based marketing services group Photon has issued a trading update showing earnings 'in line with last year'. It also confirmed that market research firm Auspoll has been merged with The Leading Edge (TLE).
 Net revenue for the four months to October 31 was $126.3m and EBITDA was $22.3m, not far below figures a year earlier, and the Group's share price climbed from 6.5c to a close of 7.8c on Friday and 8.7c today, perhaps because investors had feared that the picture would be worse following a year of troubles for the firm.
Revenue falls at ad agency Naked and research firm The Leading Edge were singled out as reasons for the lower EBITDA in the international and search marketing division, with the problems said to result from the uncertainty over Photon's recapitalisation process.
Photon appointed former News Corporation executive Jeremy Philips as its new CEO in April, in an attempt to head off a desperate financial situation over earn-out payments to recently acquired agencies. By last month, the company looked to be getting over the worst of its problems, with recapitalisation complete following the issuing of $103m worth of new shares at 10c each in September. In August, the group announced revenues down 10% to $AUD 587.3m, and an $AUD 87.5m loss for the year ending 30 June 2010.
Earnings in its Strategic Intelligence Division, which includes TLE and Jigsaw, fell 8% to $AUD 11.1m: however, TLE has recently given more encouraging signs including the opening of its first North American office, in New York, last week.
The Group holds its annual meeting on November 23. Web sites are at www.photongroup.com and www.theleadingedge.com.au .
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