The public relations group which owns top City outfit College Hill made a £4 million loss last year as it splashed out on acquisitions and increased debt.
College Group Topco said turnover was roughly flat at £38.4 million, the first full year since private equity firm Vitruvian Partners bought half the business, with management holding the rest.
College Group has £50 million of debt after a refinancing. But shareholders are receiving 10% annual interest, worth around £4.3 million, on loan notes, rather than taking dividends.
Chief executive Richard Nichols described it as “a very typical private equity structure”.
Leaving aside interest payments and other exceptionals, profits were £5 million against £5.8 million a year earlier. The accounts show it paid £5.7 million for Merlin Financial PR.
Nichols described 2012 as “a more difficult year” across the PR sector because of “a lack of M&A activity and corporate caution”.
He was upbeat about 2013 as College Group, which acts for 40 FTSE 350 firms, expands overseas and beyond financial PR. It has just opened an office in Dubai and will open in “some key commercial centres in China” imminently.
