Chime hit by loss of its biggest contract

 
Steve Dinneen
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LORD Bell’s Chime Communications has been hit by the shock loss of its contract with the US government, prompting a dramatic refocusing of its business.

It now says it is not forecasting any significant income from the US government, its biggest client, next year.

The company will be forced to lay off staff and take a restructuring charge as it shifts its attention away from its PR operations to its sports marketing division.

It is not clear how many jobs may go from its PR business, which traditionally accounts for half of the firm’s revenues.

Lord Bell said: “Because of the weak global economy we continue to expect growth, but not at the same rate as the last few years.

“We are at that point in the cycle where we need to make some investments particularly in public relations. We will continue to be acquisitive and we expect organic growth from our existing businesses and their expansion into disciplines and geographies in which we do not currently operate.

“We have continued to trade well in a difficult economic environment.”

Chime shares fell 2.2 per cent yesterday, with the firm falling by a third from its year-high of 300p. In its latest results the firm saw its profits surge 15 per cent to £14.2m. Revenue rose 13 per cent to £153.4m, with sales from its sports marketing division up 62 per cent in its first half.