NEW YORK, May 4, 2020 /PRNewswire/ --
This Shareholder's Newsletter is coming to you when we are all subject to the Global Covid-19 Pandemic. We hope you all and your families are safe and healthy!
The Covid-19 situation is having a major impact on our business overall. Still, until the end of March 2020, the effect on the Company turnover was not significant compared to budget. However, we now see a greater challenge during the second quarter of the year with much lower activity and decreased media investments across all the Company entities. Our focus since last month has been, in addition to sales, to review our costs and do savings wherever possible.
In both Denmark and Sweden, market media investments have decreased the first quarter in comparison with the same period last year. In Sweden the decrease is 10,8% compared to last year according to the Swedish Association of Media agencies.
The Company's agencies are continuing to be very active with new business, sales of new products and services both to current and new clients, and we have many quotes and proposals pending client confirmation. We continue to service our current clients and to offer them, and new clients, creative and innovative solutions to reach out in the challenging Covid-19 affected market.
Share structure of UCP
Due to the Covid-19 situation the Board of directors have decided to push the earlier planned shareholder's meeting to decide on share structure to a later time this year.
Local Planet International Ltd (LPI)
We have no specific news to report for Local Planet International.
Tre Kronor Media Stockholm and Gothenburg
In Sweden we have used the availability of short-time work allowance from the state. What this means is that 70% of the staff is working 80% of full time since April. We also have made general pay cuts for management to adapt to the ongoing effects of the pandemic. Most of the staff have been working from home the last two months. We have also made other savings on costs. In all we have managed savings to match the loss in revenues so far, and we plan for further cost savings during Q2.
We have some clients that notwithstanding Covid-19 have seen positive development. This is especially clients with a large part of their revenues coming from online-sales or being in the food or beverages industry (Lyko, Kronfågel, Di Luca). Some have had a neutral sales development, and some have had a negative sales development, especially more traditional retailers and clients within sports, travel & entertainment.
During Q1, we have successfully launched Lyko's new concept with great impact both on sales and brand values. We have also won two new clients since the last Newsletter: Krea (company/corporate loans) and Shepherd (slippers & accessories). We have not lost any clients during the first quarter.
During the first quarter a new and clear organization was implemented in Tre Kronor Media Stockholm to better match our customer base and future assignments. No new recruitments have been made. Finally, it should be noted that Tre Kronor Media, after many years of being the Agency of the year in Sweden, this year, with a very narrow margin to the first place, came in second place in the contest. We are of course not content with the Silver placement and are determined to regain the crown next year.
Tre Kronor Media Denmark, Copenhagen
The first quarter of the year started out positively both in terms of client's activities, revenue streams and new business projects. In fact, our results were better than Q1 previous year - even though it was marked by tough challenges such as the start of the Covid-19 pandemic. In Denmark it really hit the market the 11th of March when the prime minister announced a shutdown of practically the whole country. At this point we took necessary actions related to Covid-19, including social distancing and appointing work streams to keep business momentum even when working from home. We have also used the availability of short-time allowance from the state in Denmark.
Since many of our clients are operating within the travel and entertainment business this of course had a severe effect on their market investments. However, we have still managed to build business putting our efforts on clients that have a market potential during times like these – e.g. one of our financial clients increased their market investments and we've were able to foresee fantastic media deals for them. During the first quarter we were also appointed to assist one of the world's most exclusive and innovative SPA's with their launch later in 2020.
Going forward, we will concentrate on what we can impact, stay close to our customers, drive innovation and continue building on our growth strategy to be ready when the market turns.
Local Planet Nordics
We are still intensively working to win new clients and assignments. The Covid-19 affected market means that this is more challenging, but we are working on several leads.
On behalf of myself, the Board of Directors and other partners, I want to thank all shareholders for your interest in and continued support of UCP.
About United Communications Partners
United Communications Partners (UCP) is a leading Nordic Region communication's group listed on the OTC Markets under the symbol UCPA. We are comprised of award winning innovative full-service media agencies located in the Nordics. With the client's needs always top of mind, UCP's mission is to grow our client's business exponentially, utilizing cautious strategy, smart client development and expert advice. The core of our expertise exists within our pioneering performance-based marketing, advanced digital capabilities, prominent business expansion success and creative deal structuring for our clients. For more information please visit our website: www.ucpworld.com
SOURCE United Communications Partners Inc.