Hasgrove boss upbeat despite £3m loss

HASGROVE, the digital media business, has reported a £3m annual loss after what chief executive Paul Sanders said was a “very disappointing year.”

Despite a slight increase in revenues in 2011 of 2.4 % to £22.8m, one-off costs and trading difficulties led the loss compared with a £1.1m profit last year.

The AIM-listed company operates  under the Amaze, Interact and Chase brands. Based in Manchester, it has more than 260 staff.

Mr Sanders said: “The group suffered as a result of a combination of delayed client spending and overruns on two significant business solutions projects.

“As a result, changes have been made to the way that the Group operates and in particular, how it monitors project delivery and profitability.

One off costs amounted to £3.6m, with the majority being a non-cash sum of £2.7m in respect of goodwill impairment, primarily associated with the design business, the Chase.

Charges of £900.000 were associated with redundancy costs arising from cost cutting and business consolidation, completion of office moves which commenced in 2010 and bank refinancing during the year.

Despite the fall in profits Hasgove doubled its dividend to 1p per share and said this was a measure of its confidence in its prospects.

Mr Sanders said: “The group’s restructuring and focus on digital communications have resulted in improved controls and operational efficiencies which are already making an impact.

“We are pleased to have significantly reduced our net debt and to be making good progress with client projects so far this year.  More than 25% of the group’s expected profits for 2012 have been generated in the first quarter, substantially more than in previous years.

“Our confidence in the group’s potential is reflected by the doubling of the dividend.”