BrainJuicer Reports 'Poor Year' as Clients Cut Back

For the first time since it was founded in 2000, online specialist BrainJuicer has reported a 'poor year', citing a combination of flat sales and cost increases for a 45% drop in operating profit to £1.5m from £2.7m in 2011. Revenues increased very slightly to £20.8m.

Instead of spending unused budget in November and December, the firm's clients cut back, which BrainJuicer said had a 'material effect' on its profits. As a result, the firm reduced costs and made 9% of its workforce redundant, with a one-off redundancy bill of £260k. The firm said that in the future, it will be less reliant on clients releasing spare budgets at the end of the year.

Costs - excluding cost of sales - increased by 9% to £1.25m, which in the main reflected the full year impact of the investments made during 2011 as the group strengthened its teams, broadened its geographic coverage, built its infrastructure, and invested in new product development. While the period was disappointing in terms of financial results, BrainJuicer reported that its recently established businesses in China and Brazil both grew 'very strongly', and the firm also opened offices in India and France.

Sales of 'Juicy' products increased by 22% in 2012, which BrainJuicer described as a 'highly encouraging achievement'. These were offset by a decline in sales of the firm's more traditional 'Twist' products. Revenue from most of the group's largest clients, which are mainly multinational consumer goods companies, increased 'significantly' over the year.

Looking forward to 2013 and beyond, one objective is to win significant 'mandate' opportunities (where a client uses a specific market research technique from a single supplier across all of its business on an ongoing basis). BrainJuicer says that as its credibility grows, it is increasingly being invited to pitch for these opportunities.

Founder John Kearon (pictured) commented: 'After several years of uninterrupted financial success, 2012 was a disappointing year. However, it was a year in which we still made progress in our long-term mission to change the industry. We are having a promising start to 2013, and remain determined to continue to build the business in 2013 and beyond. We stress again however that we have limited visibility and so cannot predict with any certainty how the rest of the year will unfold.'

Web site: www.brainjuicer.com .