The Bookseller.com

2nd December 2008

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CSS Stellar confident over PFD

03.10.07 Joel Rickett

The chairman of PFD's parent company CSS Stellar has insisted that the agency is facing no threat to its continued existence or profitability, despite the looming exodus of agents.

In a statement to shareholders as CSS announced its interim results, David Buchler acknowledged that the company had "gone through a difficult period recently". However he maintained that his high-risk strategy of poaching Caroline Michel from William Morris to head PFD was correct: "I am confident that [our] underlying businesses provide a sound base for future growth ... I believe that PFD is better placed to face the challenges of the future than it has ever been."

Buchler made CSS' first public acknowledgement of the PFD management buyout approach. But he said: "None of these offers was at a level that in any way reflected the true value of PFD and as a consequence your board at no time accepted any of the proposals put to it. On my appointment as chairman your board confirmed its rejection of any MBO proposals and I communicated this to the management of PFD."

He went on to state that the departure of key agents would not cause a reduction in profits: "A substantial proportion of PFD's income stream is contractually protected for the foreseeable future. Our aim is to grow the PFD business and to achieve this I announced the appointment of Caroline Michel."

At the last count 21 PFD agents have resigned, including Pat Kavanagh, Charles Walker, Timothy Corrie, Ruth Young, Nathasha Galloway, St John Donald, Maureen Vincent, Wiliam Smith, Sean Kelly, Caroline Dawnay, Lindy King and Simon Trewin. Most of them are still at PFD working out their leave, but they are said to be determined to set up a new agency in January 2008.

In the CSS talent management division, dominated by PFD, turnover was up to £7.6m in the first six months of 2007, compared to £6.8m in the same period of 2006. Operating profits fell from £359,000 to £298,000, blamed on an "increase in agent employment costs".

Joel Rickett PFD CSS Stellar