Be Heard's issues profit warning

Digital marketing services firm Be Heard Group plummeted on Thursday after the group warned that full year profits would be lower than last year despite strong revenue growth.

The AIM traded company said in a trading update that costs associated with winning new business mean the 15% top line revenue growth on a pro forma basis that Be Heard Group achieved will not have a great influence on overall profits.

Indeed, the firm said that due to these costs, as well as uncertainty around contract timing and client spend volatility, the full effects of revenue growth will not be seen until 2019.

A statement from the firm said it now expects EBITDA for 2018 to be in the range of £3.0m to £3.3m on revenue of around £29m, after reporting revenues in excess of £14m for the first half of the year. In the last calendar year EBITDA was £3.6m.

Marketing activity has suffered from a recent slowdown but Be Heard said it managed to secure contracts with Aviva, GSK, blu and Equifax and management has started to reduce costs to free up funds to invest in growth for the second half of the year and 2019.

Directors forecast a strong second half of the year citing industry estimates for an increase in UK marketing and advertising expenditure, with the digital sector set to drive the uptick.

Be Heard’s shares were down 38.5% at 1.17p by the close on Thursday.