Mixed Fortunes for Creston Insight Arm

Creston has reported 'good' third quarter revenue growth in its Insight division, following the addition of new clients in the first half of the year. However, the Board says it anticipates a decline in Q4 and will make changes to reduce operating costs accordingly.

Creston comprises three divisions: Insight, Communications and Health. Its Insight division includes agencies Marketing Sciences, Fieldwork UK and ICM, and is jointly led by Marketing Sciences MD Keith Bates and ICM Group Chairman Justin Sampson.

Although during Q3 (the period to 31 December 2011) the division showed positive growth versus both Q2 and the prior year period, revenue is expected to decline in the fourth quarter due to a shortfall in new business and a delay in projects.

In its interim management statement, Creston described this anticipated decline as 'disappointing', particularly when taking into account the improving performance in the Insight division and new client wins earlier in the year.

'The necessary actions are being taken to align operating costs to the lower expected level of sales for the remainder of this, and future financial years,' Creston explained. 'However, the savings generated from actions already underway will have minimal impact in the current financial year and the revenue decline will have a direct impact on fourth quarter profitability.'

During Q3, Creston established a new healthcare research consultancy called Vitaris, to target new and existing health clients. Because the new venture was launched later than planned, its contribution to Creston's financials is anticipated to be 'below original expectations'.

Overall for the group, Creston reported like-for-like revenue growth of 7% for the three months to 31 December 2011, and says that although full year like-for-like and reported revenue growth is forecast to be positive, Q4 revenue is expected to be slightly below that of the prior year.

Web site: www.creston.com .