Photon Cuts Market Research Jobs as Earnings Climb

Australian marcoms group Photon, which owns MR firms The Leading Edge and Jigsaw Strategic Research, has made 5% of its staff redundant - a total of 129 jobs of which 17 are in its research arm.

This is despite net revenue for its Strategic Intelligence division soaring 131% to $38.2m from $16.5m for the six months to December 2008.

While business in the group's ad agencies, PR, field marketing and Internet marketing firms grew, experiential, marketing research and promotional advertising were cited as the group's weaker segments.

Photon explained that its research businesses have suffered recently as clients cut back on research and development, and said that second half forecast will be impacted as global brands reduce overall budgets.

During the period, group earnings increased 39% to $40.3m, while revenue climbed 36% to $333.2m. Net revenue increased by 40% to $221.6m from the same period in 2007 with underlying net profit after tax up 10% to $9.5m. Organic sales growth was 18%, and organic earnings growth 10%.

'Photon has been and will continue to be a major beneficiary of the reallocation of budgets into more efficient, measureable and accountable forms of marketing and sales channels,' stated Chairman Tim Hughes. 'We expect the second half to be a more difficult environment than the first, yet we are cautiously optimistic that full year EBITDA will be approximately 20%-25% and underlying earnings per share approximately 10% on last year.'

Last July, Photon's former DVL Smith Group operation was restructured to separate out DVL Smith headed by Dr David Smith in London and Strategic Intelligence Group run by John Marinopoulos in Melbourne. Smith, who now owns 100% of DVL Smith, told DRNO that the distance between the offices had been a problem for servicing clients, and as a result he and Marinopoulos had decided to return to running their original companies in their own countries. Since the reorganisation it has been 'business as usual', he added.

Web sites: www.photongroup.com , www.dvlsmith.com and www.strategicintell.com .