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Cagney Comes Out Fighting
UK-based marketing services group Cagney has announced full year results for 2008, replacing an operating loss with a small profit. The Group says it wil benefit in 2009 from significant cuts to its cost base already achieved, and that it will realign to increase its focus on insight.
Cagney's gross profit increased by 8% to £8.1m, and from an operating loss of £547,000 in 2007 it managed to climb to a small operating profit of £34,000. The loss before tax for the year was £3.7m (2007 - £3.1m), and the loss after tax £3.7m (£2.9m).
CEO Steve Mattey said more than £500,000 had been taken out of the group's cost base going into 2009, costs having been 'far too high for a group of Cagney's size' in 2007. Notice periods meant that 2008 saw little benefit from these measures with payments to senior personnel who left the Group during the year amounting to £338,000. The average number of employees decreased from 100 to 93 during the year.
Cagney combines four main businesses: Chick Smith Trott (advertising and design); Cubo (promotional marketing); The Media Foundry (public relations); and Tree (market research and data analysis). Tree grew both operating profit and gross profit, despite a slightly disappointing new business year. Cagney also has a minority stake in web chatter analysis tool A Good Listener ('AGL'), which it says 'already has clients and an impressive pipeline of potential clients'.
Mattey said 2008 had seen the first of three stages through the Group needs to pass - bringing financial robustness to all business areas of the Group. His view of the future is cautious: 'No one knows how long this recession will last, or how deep it will go. We are assuming that it will last long and be very deep'. However, the Group is trading profitably and 'entered 2009 in the best possible shape to be able to capitalise on the opportunities we believe these testing times will present'.
The second stage of the plan is to re-define the Group's business strategy and direction, of which Mattey says: 'There is an enormous proliferation of data about people and their behaviour - web usage, purchasing habits, transactional information, personal data to name but a few. Harnessing this data to understand people and reacting to it with intuitive and natural communications is the future for marketing. With this in mind, my intention is to re-align Cagney as a business delivering communications led by insight and technology.'
The third stage will be to restore carefully managed growth.
On 11 February this year the Board of Cagney announced that it had received a preliminary approach regarding a possible offer for the Company - a further announcement will be made as and when appropriate.
The Group floated on AIM in February 2006 and is online at www.cagneyplc.com .
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