Media Square set to see debts rise following advertising division restructure
Media Square has said that it expects its debts to rise this year as a result of the current economic climate and ‘pressures’ on working capital experienced by the group’s clients and suppliers.
The marketing services group, which owns companies such as The Gate Worldwide, IAS and CMW, has said that ahead of its interim results being issued for the period up to 31 August, it is likely to see its underlying debt of £19.5m, announced on 28 February, rise.
Despite this, a statement to the stock market also claimed that the group had continued to make ‘good progress’ within the current environment, and said that its operating profit and revenue for the period was expected to be ‘broadly similar’ to the same period in 2010.
The Group also highlight an exceptional charge for legal fees and restructuring charges incurred towards the end of the period, having reorganised its advertising division, expected to have cost £250,000.
Peter Reid, CEO of Media Square, commented: "The Group is trading well given the economic conditions. It is clearly a frustration that the high level of legacy debt continues to be a problem but we continue to take active steps to look at long-term solutions".