StockMarketWire.com - Creston has warned that project delays and cuts by clients will lead to significantly reduced revenue growth for the group in the fourth quarter. The group said that following revenue growth of 8 per cent in H1, growth in the three months to 31 December continued with group revenue up 11 per cent on the comparable prior year period, giving rise to growth of 9 per cent for the nine months to 31 December 2015.

Like-for-like revenue growth improved in the third quarter to 2 per cent (compared to 1 per cent in H1), giving rise to like-for-like growth of 1 per cent for the nine months to 31 December. However, in the first few weeks of 2016 the group has been advised by a number of clients, across multiple-industry sectors, of project delays and cuts.

Some of these relate to client specific circumstances, and others are due to increasing concerns that some of our clients have about the trading outlook for their businesses given the current uncertainty in the global economy. This will lead to significantly reduced revenue growth for the Group in the fourth quarter compared with the board's expectations, and given the proximity to the financial year-end, there is limited opportunity to mitigate the impact on operating profit from the reduced revenues. As a consequence the Board expects full year revenue to be up approximately 8 per cent on the prior year to circa GBP83 million and flat on a like-for-like basis, with group headline PBT to be slightly below the prior year of GBP9.9 million. In addition the Board expects to report exceptional charges against reported PBT, which is likely to include a charge for impairment in the carrying value of goodwill.

The Group continued to enjoy considerable new business success in the Period, with the Unlimited strategy resonating with clients and also contributing to an increased number of cross-referral opportunities between Creston companies and its partners. New business wins in the period included the Vodafone Customer Value Marketing account, appointments as both Sony Mobile and McLaren's global lead digital strategy agency, Creston Unlimited's appointment as British Airways' CRM and data strategy adviser, the local marketing of Bosch Power Tools and Garden UK and the CRM and digital strategy for Weetabix.

The company says board remains confident that the group is well-placed to deliver long-term growth for shareholders on the basis of its strengthened offer, blue-chip client relationships, robust cash flow generation and broadly neutral cash position at the financial year end.

Group chief executive Barrie Brien said: said: "We continue to win an enviable list of new clients across the Group, demonstrating the relevance of our Unlimited offer in the market place and representing a material increase to the wins last year. We are disappointed to have been impacted in January by a combination of one-off circumstances specific to certain clients and a cautious outlook from others, but with the good progress against our strategy, the full year effect from our new client wins and operational efficiencies made earlier in the financial year, we are establishing a strong foundation for future growth."



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