Doubled pre tax profits and major acquisition coup
a boost for Freshwater

Marketing and communications group Freshwater UK plc has today released preliminary results showing profit before taxation for the year ended 31 August 2007 doubling to £0.92m from £0.44m in the previous year.

Freshwater has also announced the purchase of the Waterfront Partnership, the public affairs and government relations firm, and its sister company, Waterfront Conferences Limited (together, ‘Waterfront’).

Freshwater’s increased profitability resulted from acquisitions, organic growth and improved operating profit margins, which, as a percentage of revenue (gross profit) rose from 16.9 per cent to 21.8 per cent in the year. The group’s trading results were its first since joining AIM in July, when it raised £4m before expenses to fund future growth.

Waterfront has been acquired for a maximum consideration of £2.24m, some of which is deferred and contingent on future profits. The price includes a mixture of cash and shares.

With 17 employees based in offices in London and Brussels, Waterfront is headed by Nicholas Finney OBE, former Director General of the British Ports Federation. The Waterfront team also includes Mark Watts, who was a Member of the European Parliament from 1994 to 2004, including eight years as Labour’s transport spokesman in Europe.

The firm provides public affairs and conference services for clients primarily within the transport, logistics, infrastructure and regeneration sectors including D P World, the Association of Train Operating Companies, the Civil Aviation Authority, the Port of London Authority, Mersey Travel, GNER and Bristol Port Company.

Waterfront Conferences hosts prestigious regional conferences and seminars for transport, infrastructure, housing, planning and regeneration industries.

Freshwater has seen increases in revenue, profits and dividends for the year end 31 August 2007. Steve Howell, CEO of Freshwater, said: “We have seen real gains this year both locally and through cross selling as the group has extended both its regional network and the scope of its national specialist areas.

“We can now meet a broader than ever spectrum of clients’ marketing requirements as well as increasing our market share in the region.”

Group turnover showed an increase of 59 per cent to £6.54m from £4.12m in the previous year, though the year only covered six months of trading by Attenbrough Saffron, the group’s largest acquisition to date, when it completed the purchase of the top ten consumer agency at the beginning of March.

Basic earnings per share were up by 58 per cent to 9.66p from 6.1p and the aggregate dividends for the year ended 31 August 2007 were 22 per cent up on the prior year.

Waterfront is the second acquisition since the group secured its AIM listing, following the purchase of Lynx PR, a Leeds-based consultancy with expertise in the utilities sector.

Steve continued: “We have continued with our strategy of building a focused and integrated group under a single brand through national specialisms and regional presence. The Waterfront deal puts us among the leaders in public affairs and conferences in one stroke and it has also given us a presence in Europe.

”We believe that there are more gains to be made in the future from being amongst the leaders in the consolidation of a fragmented industry and offering regional access to specialist and general communication and marketing services.

“Thanks to our AIM fund raising, substantial bank facilities and a positive cash flow from trading, we are well placed for future targeted acquisitions that fit in with our strategy and we will continue on this road as well as driving for more cross selling and increased efficiency.”

Nicholas Finney said: “We can see tremendous potential for working with teams across the Freshwater network. We are looking to diversify our own public affairs portfolio beyond its core areas of transport, planning and regeneration and can see great scope for doing this through Freshwater. We also believe there are opportunities for expanding our conference business by offering this expertise in other sectors, specialisms and regionally.”