Poor half-time results from marketing group Twenty reflected economic slowdown, with new client acquisition proving far tougher, as well as the liquidation of key client Inside Track.

For the half to June Twenty, led by chief executive Ian Lancaster, suffered a swing from profits of £233,000 to pre-tax losses of £980,000, on reduced turnover of £8.5m (2007: £9.5m). Lancaster explained that the liquidation of property investment group Inside Track not only resulted in 'a significant cash impact’ on the business, but also took away fee income forecast for the remainder of this year and beyond.

Twenty has since disposed of its non-core Direct Communications Division, operating in the cut-throat low-margin end of the market, for a £150,000 profit. Management argues the disposal should boost the second-half performance by allowing Twenty to focus on ‘integrated data driven marketing services’, an area from which the bulk of contract wins in recent months have come.

Now focusing on organic rather than acquisitive growth, Twenty – a GCI recommendation from 2007 at 12p – closed the half with net debt of almost £3m, more than its current lowly market cap.

While management says new business wins will see Twenty restored to operating profitability in the second half, for now, with a slowing economy beginning to bite, we think existing investors might seek fortune elsewhere and newcomers should avoid the shares.

Twenty	AIM	£1.09m	2.25p	0.00p
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