30 November 2011 - 8:38am | posted by | 1 comment

Media Square cites 'unlawful conspiracy’ by Porta Communications CEO as factor for £1.4m pre-tax loss

Media Square cites 'unlawful conspiracy’ by Porta Communications CEO as factor for £1.4m pre-tax lossMedia Square cites 'unlawful conspiracy’ by Porta Communications CEO

Marketing communications group Media Square, which recently accused Porta Communications of ‘an unlawful conspiracy’ to takeover part or all of the group, has announced pre-tax losses of £1.4m and a 2% decrease in revenue for the first six months of its financial year.

The 2% loss of £500,000 in revenue is put down to the ‘challenging trading environment’ in comparison with last year, although the group has also said that ‘prudent cost control’ has enabled the group to maintain its operating profit at the same level, with £1.1m and an operating profit of £0.7m.

The group picked up work with Associated British Foods, Kraft, Dixons, Iron Mountain, Air Partner, Genworth, MTV, NHS, Santander and Unilever over the six month period and also appointed a new CEO for CST The Gate, with former global head of Brand for Aviva, Luke Mugliston joining and CMW appointing Liz Wilson, former managing director of Albion, also as CEO.

The trading statement, made by Media Square CEO Peter Reid, also highlighted the hostile takeover bid and its legal proceedings against Porta Communications CEO David Wright, who sought to execute ‘an unlawful conspiracy’ which is says would have allowed Porta to back the acquisition of all or part of the Media Square Group.

The statement, claims that the group incurred ‘significant exceptional costs’ in dealing with the matter and has now initiated proceedings to recover the losses it believed it sustained, allegations that Porta has denied.
The group also announced a pre-tax los of £1.4m.

“The Group continues to face challenging conditions and as previously announced the full year's operating profit will be below the level of last year. This uncertain macro outlook makes it all the more important that the Group successfully delivers on a long term solution to the historical debt position, given the potential pressure on its funding position going forward,” Reid concluded.

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Comments

1 Dec 2011 - 11:40
rob_morrice's picture

Whilst it is technically true that Media Square made a loss to the tune of that reported, I think it would have been fairer if the Drum had reported that the group made a trading profit in the 6 months period of over £700,000. Nobody who works here denies we have had a rocky past, however the current plc management - who I hasten to add didn't preside over the debacle that led to the current situation - have steadied the ship and about turned the situation from horrendous trading losses to modest profits in very difficult market conditions. Anyone who reads the statement to the stock exchange will see that the losses are caused by a combination of high historic debt and provisions made to fix past problems. And of course the Porta issue hasnt made things any easier. The way it was reported masks the fact that regional Media Square agencies like IAS, SMARTS Belfast ,TwentySix Leeds and the Gate in Edinburgh are doing very well both in terms of market standing and profitability. Come on guys - give us a break. We are doing a good job for our clients, doing our best for the shareholders and trying to make a good living for our staff. The last thing we need is negative reporting that doesnt tell the whole story.

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