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Isentia closes King Content office in Hong Kong

Less than two years after buying content marketing agency King Content, media monitoring company Isentia has axed the brand, writing off US$37.8 million of its investment.

In an update to the Australian Securities Exchange today, Isentia told the market that the board had decided to kill the King Content brand and close its offices in Hong Kong and New York. King Content’s work will instead be folded into Isentia’s main operation.

Mumbrella Asia understands that the decision was made to close New York following the loss of its main client Cisco. Meanwhile, the Hong Kong closure was described by sources with knowledge of the company as a “cost-cutting” exercise – one that will result in around five job losses.

King Content originally said that the future of the Singaporean office, which has been open since 2013, was “undecided” and “uncertain”. However, Isentia has since said that the base would handle Hong Kong clients.

Mumbrella Asia understands that King Content Singapore recently lost two major accounts: the Economic Development Board (EDB) and Changi Airport Group, of which the latter’s remit was folded into creative agency J. Walter Thompson.

The company also saw a number of high-profile departures, including commercial director Peter Bakker,  who left King Content in January after six years, and strategy head Daniel Hochuli, who left to join LinkedIn in April.

Isentia appointed Jason Lee to oversee the role of commercial director in Singapore last month.

In a statement given to ASX, Isentia signalled further job losses at King Content:

“The King Content brand is being discontinued and its operations fully integrated into Isentia under the Isentia brand. We have closed the King Content New York and Hong Kong offices and will continue to service our US clients out of the UK and our Hong Kong clients out of Singapore. We have further cut the ongoing headcount in the content marketing business.”

It said that revenues would be $155.1m for the year. In the last financial year they also came in at $155m.

Profits will be down on last year, with Isentia signalling underlying profits of $41.5m, compared to $51m last year. However, because of the writedown of the King Content investment, the reported profit number will be far lower.

The update revealed that King Content was loss-making, losing Isentia $4.4m in the last financial year compared to a profit of $3.6m the year before.

In more bad news for the market, Isentia said it had needed to allow $0.5m for “bad debt clean-up in Asia”. It also said that the decision to put up its prices for its main business of media monitoring had led to reduced revenues in Australia and New Zealand during the last three months of the financial year, which ended on June 30.

Isentia also told the market that the deployment of its Mediaportal service in Korea had been delayed.

When King Content was sold by founder Craig Hodges in 2015, the headline price for the deal was $48m, although some of this was due to come later, based on the agency’s future performance. The $37.8m figure is likely to reflect the total Isentia actually ended up paying for King Content.

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