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Freshwater announces annual results

Freshwater has defied the economic uncertainties of recent months to deliver a 61 per cent growth in revenue (gross profit) for the year ended 31 August 2008.

Freshwater has also announced success in its bid to be in the frame for possible Central Office of Information (COI) contracts, having been appointed for 11 national, regional and specialist frameworks across the UK.

Freshwater has reported on its eighth successive year of profitable growth with sales up by 46 per cent to £9.52m (2007: £6.54m) and revenue up to £7.51m (2007: £4.66m). 

Profit before taxation has also risen to £1.17m, a growth of 27 per cent compared with the 2006/7 financial year.  A proposed final dividend of 1.5p takes the total in respect of 2007/8 to 3p (2007: 2.98p) Operating activities in the year ended 31 August 2008 generated cash of £1.00m, compared with £0.81m in the previous year.

The profit growth was achieved in spite of an exceptional bad debt of £0.16m, incurred when a house building client unexpectedly went into administration as the credit crunch began to take hold.

Chairman Baroness Cohen of Pimlico said: “The results show that we are financially strong, with a substantial positive cash flow from trading. “They also highlight the benefits of a large and diverse client base and a high level of revenue visibility. “During the year, we continued to invest in our business, achieving growth both through complementary earnings-enhancing acquisitions and organic growth of 8.6 per cent on a like for like basis.”

Chief Executive Steve Howell said: “We have built a leading regional-specialist communications consultancy and our robust business model has meant that any shortfalls in the sectors hit hardest by the economic downturn have been offset by strong revenues from defensive sectors, such as utilities, healthcare, transport and the public sector.

“This part of our balanced strategy will continue to bear fruit as evidenced by our successful bid to secure a position on 11 (nine regional and two specialist) COI frameworks.

“Trading in the fourth quarter of 2007/8 was strong but overall, the first quarter of 2008/9 is expected to be disappointing as a result of the economic downturn. “The group is restoring margins by taking action to cut costs and we have visibility of 90 per cent of our revenue in the second quarter of the financial year.

“We have a healthy new business pipeline and now have the opportunity to win more public sector work as a result of the COI tender success. The combination of improved efficiency and the new opportunities open to us will enable the Group to deliver a stronger performance through the rest of the year, in a difficult market.

“The Board believes that we are well placed to compete in this environment as a result of our diverse client base, unique regional-specialist offer and largely regional cost base.

“We have also taken steps to streamline our PLC overheads by reducing the Board from eight to six people. Chairman Baroness Cohen is to step down at the Group’s AGM in February alongside Bart Haines. She will be replaced by existing non-executive director, Marie Louise Windeler, the former Chief Executive of Hill & Knowlton, one of the industry leaders and part of global marketing giant, WPP.”

During the year under review, the Group acquired and successfully integrated Lynx Public Relations, a Leeds based utilities sector community relations specialist (acquired 1 November, 2007), the Waterfront Partnership, a London and Brussels-based public affairs agency and the Waterfront Conference Company (1 December, 2007) as well as Merlin Marketing and Public Relations, a Cardiff-based full service agency (1 February, 2008).

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