Thursday, 24 February 2011

A disconnect with the real world

So in the real world
- rumours of a double dip recession
- inflation getting to be a nasty problem
- 'savage' cuts happening that will further drive down consumer confidence
- retailers saying feb figures look grim

In the OME world
- wildly busy
- most agencies and media i respect also say they are doing great
- retail clients expanding
- even had some not very interesting enquiries about taking a stake in our biz

Where is the truth? I have not got a clue but i prefer the latter scenario.

Wednesday, 9 February 2011

Tribal Resourcing sold to TMP (UK)

So sale of Tribal to TMP is clearly quite interesting. This is my very quick take on it.
1. sold for £1 - puts it in same cost bracket as the Evening Standard sale in 2009. Statement of the obvious but there is clearly something wrong with underlying profitability of a company that is given away, is it crippled by high costbase? declining markets? losing too much money? duff product? or more likely a combo on some or all of the above.
2. 2010 - £37000 profit on £39m turnover - is a 0.1% return. Ouch...One presumes that most of this turnover was media billings and such like so those figures are pretty horrible given that 2011 is going to be uglier in their markets (government/health)
3. My non insider view is that they are caught in perfect storm of reliance on public sector and still largely print revenues which are in cyclical and terminal decline respectively.
4. TMP (UK) taking it on - possibly most interesting thing. Their mgmt (and investors) must believe that they can convert the client base to digital, sell more product and retain in long term relationships. And economies of sale are obvious too. But, and i say this no relish, one would presume the cost cutting would be quick and deep to get things moving in right direction. Their must be some brand equity in the Tribal name and i have no idea how they intend to run the brands.

Anyway - i am sure we will get some statements from both parties in next few days - which will clarify the situation.