Huntsworth, the U.K. PR holding company owner of Grayling, Red, Citigate and Atomic PR, said it will fall short of profit expectations this year as more than £4M in scheduled Q4 projects were cancelled because of global economic uncertainty.
The hit has Huntsworth planning cutbacks.
"On the assumption that these client cutbacks are further signs of a lasting economic downturn in our primary European markets, we have taken the decision to reduce our cost base to ensure that, within six weeks, at the start of 2012, we will have returned the group to its historic operating margins," said chief operating officer Sally Withey.
Despite the setback, the company said third quarter like-for-like revenue increase seven percent and noted "significant," seven-figure business wins locked up recently will become operational in Q1 of 2012.
Withey said client cuts in the U.K. and Europe are in "fast-moving" consumer goods, consumer durables, environmental and CSR programs, while U.S. clients are showing "nervousness" in the pharmaceutical industry leading to slowing spending decisions and delaying new business starts.
In its more detailed first-half financial report in late August, Huntsworth had 1.3% revenue growth for the first half of 2011 to £88.1M as CEO Peter Chadlington said clients are taking much longer to make spending decisions and a "subdued" IPO and M&A market hurt Citigate.