Centaur Media PLC (LON:CAU) has reported lower earnings in its first half as what it said was an “encouraging start” to 2020 was derailed by the onset of the coronavirus pandemic.
For the six months ended June 30, the market intelligence consultancy reported adjusted earnings (EBITDA) of £1mln, down 17% on the prior year, while revenues sank 27% to £17.7mln.
The company said it had “performed well” in the initial months of 2020 and was on track to achieve revenue growth targets set out under its margin acceleration plan 2022, however, from March it had begun to feel the impact of the pandemic on its business.
The biggest losses came from the company’s MarketMakers and Econsultancy businesses, as well as the closure of Marketing Week Live in 2019 and a loss of advertising and events at The Lawyer magazine.
However, the firm said moves to cut costs by halting recruitment, furloughing 25% of its staff and reducing executive and management pay had “mitigated almost all the margin impact from lost revenue”.
Looking ahead, Centaur said it is reviewing the targets for its margin acceleration plan, although currently it said it has “little visibility” beyond the third quarter and the full-year results will depend on the performance of the Festival of Marketing and The Lawyer Awards.
“With the short-term outlook for face-to-face events remaining uncertain due to government and client companies' restrictions on travel and meetings, and concern for the safety of our employees, the new online format for our second-half events makes forecasting difficult”, the company said, adding that the pandemic was also “likely to result in some customers delaying purchasing decisions as the economic and business outlook remains uncertain”.
“In the context of market conditions and the ongoing uncertainty, we continue to be encouraged by the performance of a number of our key brands where we adapted our offering as we went into lockdown. The profit margin shortfall arising from the revenue reduction was substantially mitigated by the flow through of 2019 cost reductions as well as further cost savings we have implemented this year”, said chief executive Swag Mukerji.
“With that in mind, we are confident that Centaur will emerge from 2020 a more resilient business well-positioned to take advantage of future opportunities. I would like to thank our customers and our employees for the tremendous energy and flexibility they have shown in these difficult times", the CEO added.
The shares were flat at 24p in early trading on Tuesday.