NEWS25 August 2009

Restructure for Opinion Leader as change in gov't looms

Financials UK

UK— Chime Communications is to restructure its Opinion Leader business, mindful that a possible change in government next year could lead to a change in research priorities.

Opinion Leader has made a name for itself conducting high-profile, large-scale deliberative research projects for the Labour Party during its 12 years in power. But what was fashionable then might not be so popular under a Conservative government led by David Cameron.

“We’re not saying [deliberative research] will stop, but it will probably become more digitised,” said Chime chairman Lord Tim Bell.

The group recently launched an online community business called Caucus World in anticipation of this move – and in response to growing demand for this type of research among private sector companies.

Delays hampered the launch of Caucus World which impacted the financial performance of Chime’s research division for the first half of the year.

Revenue for the division – which also includes fieldwork firm Facts International, ethnographic agency Naked Eye and luxury goods research Ledbury – was down 38% to £4.6m while operating income fell 26% to £3m. Operating loss was £23,000 compared to profit of £460,000 in the same period last year.

Caucus World has started to generate income, with five clients already signed up, and the business is expected to move into the black during the second half of the year.

However, troubling times at Opinion Leader are expected to continue until the end of 2009, following a year-on-year decline in profit in the first half.

A restructuring of that business is in the pipeline, with the aim of addressing three trends “we are concerned about”, said Bell – including the prospect of a change in government. Chime also sees a greater focus in the market on quantitative research services rather than qualitative, and the continuing shift away from face-to-face or person-to-person data collection to more electronic means.

“During the course of the year we will bring in new management and reposition the research division with the expectation of a strong performance in 2010,” the company said in its review of operations.

Group revenue – including contributions from the PR and advertising and marketing services divisions – was up 19% to £137m while operating income climbed 7% to £58.4m and operating profit rose 3% to £9.4m.