Exclusive: 5 Villages Group says Manchester agency is rebuilding after losing clients and staff but insists it expects to return to profitability.
The owner of Manchester digital agency Candidsky has acknowledged that the business has lost clients, undergone significant restructuring and experienced tight cashflow following its takeover just over a year ago.
In a series of detailed responses to Prolific North, parent company 5 Villages Group said Candidsky had endured a “challenging trading period” following the departure of senior staff but insisted it remained financially viable and expected to return to profitability this year.
The admissions come as Prolific North has investigated developments at the agency following its acquisition by 5 Villages Group in May 2025.
The investigation has included interviews with several people with current or former links to Candidsky, as well as individuals connected to other businesses within the wider group. Prolific North has also reviewed company correspondence and other documents.
A takeover built on ambition
When 5 Villages Group acquired Candidsky in 2025, both companies spoke confidently about the future.
Announcing the deal, Candidsky said: “When one door closes, another opens & joining a successful group like the 5 Villages Group means there’s nothing holding us back from becoming the best search and creative agency in the North!”
Shortly afterwards, David Vernon was promoted from managing director to chief executive.
At the time he said: “I’m incredibly proud to be stepping into the CEO role at a company I care so deeply about. Over the past six years, we’ve grown Candidsky into a bold, people-first agency that delivers exceptional results.
“With the support of Don, our new chairman, and 5 Villages Group, our new owners – I have full confidence we’ll be able to take Candidsky to new heights. Our next chapter begins now.”
Chairman Don Iro said: “David’s promotion to CEO marks a significant milestone for Candidsky as we move into a new phase of strategic growth.”
CEO departure
Less than a year later, Vernon resigned. As previously reported by Prolific North, he said: “I can confirm that I have resigned my position as CEO of Candidsky, effective Monday. I’m immensely proud of the seven years I spent building the business and the results the team achieved during my tenure.
“While I have seen some inaccurate narratives suggesting otherwise, my departure was a decision I took to prioritise my professional standards and integrity.
“As there are ongoing legal proceedings regarding my exit, I’m sure you’ll understand that I cannot comment on the specifics or the circumstances at this stage.”
Candidsky said at the time that the business continued to operate normally.
Prolific North has since seen Employment Tribunal documentation showing sn ET1 claim form as submitted and the claim as accepted.
At the time the documentation was reviewed, an ET3 response from Candidsky was listed as not yet available.
The claim has not been determined. The existence and administrative acceptance of a tribunal claim do not mean its allegations have been proven.
Client losses
In responses to Prolific North, 5 Villages Group acknowledged that Candidsky had lost clients.
The company said: “Candidsky has experienced a challenging trading period. A number of clients left following the departure of members of the senior team last year, and the business is currently rebuilding its leadership, client base and market position.”
It added: “Candidsky is not presently trading in line with its original expectations however it is expected to be profitable this financial year. Cashflow remains tight and has, at times, been affected by the timing of customer receipts.”
Former employees also described clients becoming concerned about the turnover of staff working on their accounts.
One former employee said: “It has lost some clients, and some clients were distressed by the amount of staff turnover.”
Another questioned how the agency could continue winning new business with such a reduced workforce.
“They were saying they needed new clients,” the former employee said. “But to sell something you need to have confidence it can be delivered. When you’ve got no team there, that becomes extremely difficult.”
The group said it had nevertheless made “material investment” in the business, including through staff bonuses and pay increases across most of the team.
Workforce transformed
5 Villages Group accepted that Candidsky had undergone significant organisational change.
It said: “Candidsky has undergone a significant period of change over the past year. The change has principally resulted from resignations, together with one performance-related dismissal.”
But the group rejected suggestions that the departures could simply be attributed to culture or management.
It said: “The Group does not accept that the changes can properly be attributed solely to concerns about culture or management.”
Former employees told Prolific North that the agency’s headcount had fallen dramatically following a succession of resignations.
5 Villages Group declined to provide a current employee figure, but said Candidsky now operates using a combination of permanent employees, specialist consultants and resources shared across the group’s marketing businesses.
It said: “This enables specialist expertise to be brought into client work when required, without maintaining full-time roles where the current volume of work would not support them.”
Payroll and pension pressures
5 Villages Group also acknowledged that salary payments had been delayed across parts of the group during April, May and June 2026.
It said the delays arose from short-term cashflow pressures, including the timing of receipts from key customers.
By 9 July, it said the “substantial majority” of affected employees had been paid in full, although payments remained outstanding to two former employees.
It also acknowledged that some pension contributions had been remitted later than intended and that certain amounts remained outstanding as of Candidsky’s response on July 29, 2026.
The group later said the payroll and pension issues had been “substantially addressed” following Iro’s appointment of a new payroll provider.
Turnaround strategy
The group said Candidsky should be viewed as part of its wider turnaround strategy.
It said its model involved acquiring businesses already facing financial or operational difficulties before investing to stabilise them.
The company said: “Businesses acquired in those circumstances will often have significant pre-existing financial, operational and management issues. Those issues cannot always be resolved immediately and may require sustained investment, careful cashflow management and changes to the way the business is operated.”
It added: “The Group makes every reasonable effort to preserve its businesses as going concerns and retain as many jobs as possible.”
According to 5 Villages Group, leadership changes are sometimes necessary to secure a business’s future.
It said: “Successful turnarounds sometimes require changes in leadership, staffing or operating structure to enable a business to move forward.”
Expansion continues
Despite Candidsky’s difficulties, 5 Villages Group has continued expanding during 2026.
5 Villages Group said Candidsky was not in administration, was not subject to formal insolvency proceedings and there were no current plans to close the business.
Asked about Candidsky’s future, the group said the agency remained an important part of its long-term plans and was expected to return to profitability during the current financial year.
The company also confirmed that while closer integration between its marketing agencies remained under consideration, no formal timetable had been agreed.
Prolific North put detailed allegations to 5 Villages Group over several rounds of correspondence extending across multiple weeks. The company was invited to respond to every significant allegation raised by sources and to provide any documentary material it believed contradicted the evidence reviewed by Prolific North.
Prolific North has included those replies throughout this report, which also carries verbatim responses from the Group, which it acknowledges has been forthcoming and candid in its replies which have been appropriately published for proper balance.
