Media Square axes 9% of workforce

MEDIA Square, the Cheshire-based marketing company, has cut around 90 jobs as its clients have slashed their marketing budgets.

The AIM-listed company said that it has seen a “change in client sentiment” because of global economic conditions, in the final quarter to February 2009, and is cutting 9% of its 1,000-strong workforce as a result.

It said there had been significant reductions in client spending plans, particularly from clients in the automotive, retail and from one of its largest clients in the financial services sectors.

Executive chairman Roger Parry said in a trading update: “It is regrettable that the group has had to take these cost reduction measures but the current state of the economy makes this inevitable and we therefore believe it is best to act quickly.”

It expects operating profits to fall below market expectations but added that good operational cash flows and the recent sale of certain non-core assets meant its cash balances and net debt position would be ahead of market expectations.

But the company added that it was “extremely hard” to predict profit levels for the next 12 months.

Mr Parry added: “The turn-around of Media Square continues to go well and as we enter the second year of a three year programme we have a simpler, smaller and stronger group of agencies which will enable us to confront the recession with more stability.”

Media Square was founded in 2000 as a cash shell and has grown rapidly by acquisition. It has its registered office near Macclesfield which is also home to its business-to-business marketing agency IAS.

In the six months to August 31 the business made a pre-tax profit of £900,000 on sales of £33.1m.