MARKETING group Next Fifteen wrote off almost £2m related to a fraud at the company’s PR firm Bite Communications yesterday.
The alleged embezzlement, which the company said was down to a senior employee at Bite’s San Francisco office when it flagged the situation last month, is being investigated by the FBI. The announcement had sent the shares down as much as fifteen per cent.
“All steps will be taken to recoup lost assets but it is too soon to estimate the likely scale of any recovery,” Next Fifteen said.
The $2.8m (£1.75m) writedown led to the company announcing a 21 per cent fall in pre-tax profit to £6m, even as revenues increased from £86m to £92m.
The “complex fraud” had delayed the annual results by three weeks. Next Fifteen’s chairman Richard Eyre said he had seen “strong operational performances” from every aspect of the group, which is transitioning from traditional PR to digital marketing services.
“This strategy is giving the group access to new revenue streams and helping drive growth in many global markets,” he said.
The technology PR divisions still account for two-thirds of revenues, however. Bite’s clients include Microsoft, Nokia and Sony, although it lost Hewlett-Packard this year.