TNS hit by American slowdown

One of the world’s leading market research companies saw its share price plunge today after detailing a poor performance from its US business.

Taylor Nelson Sofres, which provides customer data and research for blue-chip clients, lost a fifth of its market value at one point after announcing a slump in revenues in the US during the first half of the year.

The company, which has substantial operations in the UK, had hoped the US arm would pick up, but now admits a recovery is unlikely this year.

In a trading statement to the stock market, the company blamed a spending cut by a major technology client for the fall in revenues. It also pointed to mounting pressure in America from the growth in the number of internet-based consumer research firms.

As a result of the poor US showing, which makes up 15% to 20% of the firm’s workload, the group recorded underlying revenues growth of 3%.

Chief executive David Lowden said: “The performance of our US custom business has been unacceptable. It has held back an otherwise good performance, with the rest of the group achieving underlying revenue growth of almost 6% in the first half.”

The company has already taken steps to replace some management and is in the process of restructuring the organisation in United States. It hopes the changes will bring £10m (€14.4m) worth of savings.

Mr Lowden said: “I am confident these actions will return the group to satisfactory levels of growth for 2007 and drive further improvement in the longer term.”

Following the announcement Numis Securities lowered their full-year profit estimate for the company to £87m (€125.2m) from £102m (€146.8m).

TNS forecast that Europe will deliver steady underlying revenues growth for the remainder of the year and Asia should maintain its strong performance, it said in the statement.