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TNS Shares Pause at Three Year Low
TNS' UK share price looks more stable today after a dramatic fall on Thursday and Friday last week. The drop followed a warning on full year operating margin and comments by Chief Executive David Lowden, who blamed problems on the 'unacceptable' performance of the American custom business.
Lowden said the US custom showing had 'held back an otherwise good performance.' Analysts reduced their profit forecasts for the agency by up to 15% and the share price fell by a similar amount from more than 230p on Wednesday to 195p on Thursday and 183p on Friday, its lowest since 2003. Today the price has remained in the low 180s.
The firm cites increased competition in online research, as well as a further reduction of its business with one large technology client, as factors in its troubled US custom showing.
Underlying revenue growth in the first six months of 2006 is expected to be around 3%. The UK operation has returned to growth during the second half of 2005, while Europe as a whole shows steady growth and in Asia-Pacific growth is expected to remain excellent. The restructuring process now being led by TNS North America's new President, Kimberly Till, is not likely to make its benefits 'fully felt' until 2007, the group said.
TNS is online at www.tns-global.com .
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