Media Square dips into red

The marketing services company Media Square has plunged into the red, reporting a total loss of £24.5m for the year to the end of February, but says it has now returned to profitability. The company, which owns ad agencies including Chick Smith Trott, reported an operating loss of £19m. When exceptional items are stripped from this figure the company reported an operating loss of £885,000 for the period. Media Square saw revenues fall 23% year on year to £47.3m as earnings before interest, tax, depreciation and amortisation fell to just £100,000 – compared with £3.7m for the year to the end of February 2009. In the second six months of its reporting period, it reported a "significantly improved performance" with headline operating profit of £400,000. Media Square, which has shrunk from 40 operating units in 2007 to just 11 as it undergoes a three-year restructuring, said that March and April have produced "encouraging trading results" with operating profits "in excess of budget". "The structural turnaround of Media Square has now been completed," said Roger Parry, chairman of Media Square. "The company is now smaller, simpler and stable. The results reflect the challenges of restructuring an already weak business against the backdrop of the credit crunch." Media Square saw net debt rise by more than £6m over the period to £19.9m. Group headcount has reduced from more than 1,500 to 730 over the three year period of the restructure. • To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. • If you are writing a comment for publication, please mark clearly "for publication".