Shares in the marketing communications sector continued to outperform the FTSE All-Share Index in the month to 12 May, but both indices lost ground over the period.
The marketing industry’s MSFI Index fell by 1.75% to 27.9 (Jan 2001: 100) while the FTSE All-Share Index fell by 2.51%.
Contributing to the drop in the MSFI Index were big falls in the share price of Chime Communications and Cello Group. Chime’s price decline was prompted by two pieces of bad news – first that founders Lord Bell and Piers Pottinger want to buy out much of the Bell Pottinger public relations division, and secondly that trading performance in the public relations division is falling short of expectations (see Chime in PR profit downturn: Bell Pottinger buyout progressing).
The price decline at Cello appears not to be related to any recent event other than disappointment at the loss reported in March after writing down the value of the Farm agency that it no longer owns, and perhaps fears that the group’s trading situation has not improved much since (see Cello loses £0.6m after exceptionals of £4m).
The biggest share price fall was inevitably at Adventis Group where problems have arisen in raising additional share capital and the bank is threatening to pull the plug (see Adventis faces administration threat after failing to raise new capital). Shares in Huntsworth also lost 10% of their value in the month after reporting disappointing results (see Huntsworth profit almost halved).
On a brighter note, Progressive Digital Media’s share price improved by 25.9% in the month after the company raised more share capital and converted loans from its founder Mike Danson into shares (see Progressive raising £20m new capital: Danson loans to be converted).