Event agency Crown Business Communications has filed a 23 per cent increase in turnover for 2010, but the introduction of a controversial Employee Benefit Trust (EBT) impacted on the bottom line.
Turnover grew to £5.3m for the year ended 31 December 2010 and gross profit increased by 13 per cent to £3.3m. However, administrative expenses grew by 16 per cent to £3.27m, with a 78 per cent increase in directors’ remuneration to £476,000 and a payment of £487,000 into a newly established EBT. This resulted in a 69 per cent decrease in profit after tax to £54,000.
EBTs are funds from which interest free loans, shares and other benefits can be granted to directors, employees and their families, in turn allowing companies to reduce their tax liabilities, but they were effectively stopped last December following a ruling by HMRC.
The accounts also note tax losses of £1.32m that have been carried forward to be used against future profits.
The balance sheet remains healthy showing net current assets of £1.1m, although cash at bank did reduce during the year (from £2.19m to £1.46m) following the purchase of fellow event agency Acclaim in a pre-pack administration deal.
Nicky Havelaar, Crown’s managing director, declined to speak to meetpie.com, however she did state in the Directors’ Report that the acquisition of Acclaim had “propelled Crown into the top five UK agencies in the corporate communications sector.”
“In August the company acquired the business and key staff from Acclaim, a specialist in audience engagement and brand communications,” she said. “The current year therefore includes some one off costs for the acquisition and integration of the two companies. The full benefit of the acquisition will not materialise until 2011 when we will have a full year of the combined business and efficiencies. The combined business has won substantial new clients and contracts and is well place at year end to achieve its objectives of continued growth with funding in place.”
In addition, Crown has recently been selected by the Department for Education (DfE) as one of 12 companies that will help build a supply chain for delivery of creative media services.
Pictured: managing director Nicky Havelaar