MARKETING firm Creston reported a nearly 80 per cent slump in profits during the first half of the year yesterday, missing market expectations and causing the company’s share price to drop by over seven per cent.
The drop was due to the firm’s US agency losing a key contract and Creston’s high level of pitching activity, which led to profits falling to £1.7m during the six months to 30 September.
“The end result is that we’ve won £7.9m of new revenue in the first half. The downside of that is that we incurred a loss of billable time during that pitching process,” Creston chief executive Don Elgie told City A.M. “We took a hit on the chin to go for that new business… to see the benefits in the second half of the year.”
Revenue for the group fell four per cent to £35.7m during the period, but analysts remained upbeat on Creston’s performance in digital.
Liberum Capital media analyst Ian Whittaker described Creston’s booming digital business – accounting for 52 per cent of total revenues – as “structurally positioned for rapid growth.”
Creston’s share price fell 7.3 per cent to 92p yesterday.