It has ended negotiations with its Lloyds-led syndicate that put pounds 55m of its debts on a three-year facility, while the remaining pounds 16m is on an annual facility. Previously all its bank debts were reviewed annually.
The group still has a negative net worth of pounds 74.7m and has been expected to launch a rights issue to bolster its balance sheet. The new loan facilities allow it to do this when it considers the time is right.
But Lorna Tilbian, an analyst at SG Warburg Securities, said Shandwick might now be able to pay down its debt out of earnings and avoid a rights issue.
Earnout payments, which peaked in the 27 months to 31 October 1991, when acquisition-related payments were about pounds 70m, only amounted to pounds 5.6m in 1992-93. The management's estimate of future payments is pounds 8m payable over the next three years.
Shandwick reported operating income of pounds 101.2m for the year to 31 October 1993, against pounds 93.2m the previous year.
It made pre-tax profit of pounds 4.8m. The comparative 1992 figure falls from a profit of pounds 2m to a loss of pounds 2.5m after adjustment for the new FRS3 accounting rules.
Commenting on the latest financial year, Dermot McNulty, chief operating officer, said: 'We saw the most improvement in the Asia Pacific region, primarily in Australia, and in the large full-service companies in the US.
'But the dark horse that we began to see towards the end of the year, and we are seeing very strongly in the early months of this year, is the UK.'
Earnings per share are 6.4p after a tax credit. But before that they are 2.5p, which compares with a 4.7p loss in 1992 restated for FRS3. There is no final dividend, although the board said it would review dividend policy this year.
Trading is going well so far this year. 'We are trading ahead of our budget levels in three of the four regions of the world,' Mr McNulty said.
'The UK is extremely strong, and frankly it has been a few years since we saw that. Continental Europe is ahead of its projections, and so is Asia Pacific.
'North America is behind its projections, but the reason that it is behind is that people have been so preoccupied working on new business pitches that they have been unable to devote so many hours to existing clients. I am confident that our income in that part of the world will improve later in the year.'
Bottom line, page 30