US strength cushions GGT slide
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Your support makes all the difference.GOLD GREENLEES TROTT, the advertising agency best known for its Red Rock cider campaign, yesterday reported a 19 per cent drop in taxable profits to pounds 4.1m for the year to 30 April.
The result reflects the impact of the recession on the advertising market and higher interest charges.
However, a strong performance in the US cushioned the profits decline at the operating level. Group trading profits were down just 7.5 per cent to pounds 5.2m thanks to a 64 per cent boost in US profits to pounds 3.6m.
Mike Greenlees, the joint chairman, said that the US profits growth stemmed from a surge in new business.
But sharply reduced spending by clients in the UK caused a 40 per cent decline in trading profits to pounds 2.8m last year. GGT lost only one significant account - Marlboro cigarettes - in Britain, but depressed consumer spending prompted a reduction in advertising campaigns.
The results were boosted by an pounds 826,000 exceptional surplus on the sale of a subsidiary and a pensions holiday, after taking into account redundancy costs of pounds 206,000 and bad debts of pounds 245,000.
Interest costs jumped from pounds 470,00 to pounds 826,000. However the group's net borrowings eased back from pounds 13.5m to pounds 11m.
A lower tax charge checked the fall in earnings per share to 17.28p, 10 per cent down on the previous year. The total dividend is held at 8.3p.
Mr Greenlees said there were few signs of an upturn. 'If the consumer returns to the high street . . . we can expect a swift reaction from our clients which is likely to result in increases in advertising and marketing activity. If not, then like everyone else we will have another difficult year.' The shares fell 5p to 230p.
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