Operating profits surged ahead by 42 per cent to pounds 1.6m but that was offset by an almost 60 per cent decline in investment income to pounds 310,000. The fall was the result of much lower interest rates, down by more than 40 per cent since the same time last year. Earnings per share were down 3 per cent to 8.3p but the interim payout goes up 11 per cent to 1.46p.
The company, which is the UK's largest independent buyer of advertising media, said that first six months' turnover comparisons with 1992 had been hit by a shift towards the second half. Last year saw an 'unusually even' split. But this year client expenditure has been biased towards the second half, and CIA expects that for the year as a whole all operating businesses should boost their turnover.
Costs have risen by 13 per cent because of 'investment in senior management' as well as new businesses launched in 1992, although the company said the rate of cost increase should be substantially reduced relative to turnover in the second half. CIA's operating margins have improved because of higher profitability of its media consultancy arm and a move to a fixed fee payment by clients instead of commission based on their advertising spending.
However, the results were accompanied by a cautious trading statement: 'The UK advertising market is showing signs of recovery and although all clients may not be increasing their budgets, at least reductions in expenditure are now relatively rare.'
Despite the careful tone of the statement, CIA is still planning for expansion. It hopes to make selective acquisitions and joint venture arrangements in both Continental Europe and the US.Reuse content