LONDON--Huntsworth Group has reported a seven percent increase in like-for-like revenues in the third quarter of this year.

However the PR holding group, which owns Grayling, Huntsworth Health, Citigate and Red Consultancy, also revealed £4m worth of client budget cuts. Huntsworth shares were down by almost 20 percent this morning as this story went live.

“The timing of these cutbacks coming so late in the year will not enable us to reduce costs accordingly,” said Huntsworth COO Sally Withey. “We therefore expect to fall short of management profit expectations by £4m.”

Withey added that the group will take steps to reduce costs so that, by the start of 2012, “we will have returned the Group to its historic operating margins.” She also pointed out that the group is assuming “these client cutbacks are further signs of a lasting economic downturn in our primary European markets.”

Withey noted that in the UK and Europe, which account for almost two-thirds of group income, “these cutbacks are in fast moving consumer goods, consumer durables, environmental and CSR programmes and, in the USA, nervousness in the pharmaceutical industry is slowing spending decisions and delaying new business starts.”

Citigate reported 15.5 percent growth in the third quarter, Grayling 5.2 percent, Huntsworth Health 3.7 percent and Red 15.6 percent.

“The Group strategy is to win two and three year global and multi-office contracts,” added Withey. “The pipeline for these larger mandates is good and following our brand rationalisation, our success in winning them has considerably improved in the third quarter.”