Chime profits fall in wake of Bureau sting

A bumpy road. Profits dip at Lord Bell’s PR firm.

Lord Bell’s Chime Communications reported a surprise slump in trading in its public relations business, including Bell Pottinger.

The profit warning follows a stream of negative press after a Bureau sting exposed the firms ‘dark arts’ lobbying tactics and its willingness to act for authoritarian regimes.

The Financial Times reports that Chime chairman Lord Bell admitted the coverage of the Bureau’s undercover investigation in the Independent newspaper ‘had a deleterious effect on the morale of my people and on relationships with clients’.

The firm also lost a major US Department of Defense contract last year.

Sir Martin Sorrell, a Chime shareholder and head of PR and advertising giant WPP, is quoted in The Independent saying: ‘We note with interest the ‘sudden’ decline in PR revenues in the UK.’ Sorrell said WPP had not experienced the same slow down.

PR Week reported in March that Rolls Royce was ending its contract with Bell Pottinger after nine years, although a spokesman for the company denied the move was down to negative press. The Telegraph has also suggested that Bell Pottinger failed to win several pitches in the New Year.

At Chime’s AGM on May 9, more than a third of shareholders voted against or abstained from voting on the re-election of Lord Bell, fellow PR man Piers Pottinger and other directors.

Lord Bell is heading a management buyout of Bell Pottinger. The move is being fiercely opposed by other Chime shareholders, such as Sir Martin, but it is expected to be agreed by the end of June.

The peer told the AGM: ‘Significant progress has been made on this potential buyout with the main terms being agreed involving the following businesses: Bell Pottinger Sans Frontières, Bell Pottinger Public Relations, Bell Pottinger Middle East, Bell Pottinger Public Affairs, Chime’s 60% and the 40% management stake in Pelham Bell Pottinger together with various Group central costs.  Chime would retain a 25% minority stake.’

The following information updated on 18.05.12

In the last week Bell Pottinger has undergone further changes, announcing a managerial buyout of some companies from parent company Chime Communications. Lord Bell will take Bell Pottinger Middle East, Bell Pottinger Public Affairs, Bell Pottinger Public Relations, Bell Pottinger Sans Frontieres and Pelham Bell Pottinger from Chime.

News of the buyout follows the announcement of the departure of chairman of Bell Pottinger Public Affairs, Peter Bingle.

Lord Bell told PRWeek: ‘Peter Bingle is going to pursue his own affairs. He’s decided to go off and do his own thing.’