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Aegis sees profits leap 9% as growth predicted in 2004

LONDON - Aegis has said revenues at its media agencies leaped by 9.2% for the first half of the year to £201.2m, as it predicted an increased rate of adspend growth in 2004.

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Overall pre-tax profits were up by 3% to £30.9m at the company, which helped to push its shares up this morning, building on the rise over the past week. Its shares were up by 0.5p to 106.5p when the market opened this morning.

It is the first time that the company has reported results for Aegis Media, the division formed in June to handle all of the company's media interests, namely: Carat; Vizeum, the second-string media agency also formed in June; and Posterscope.

Carat increased turnover in Asia Pacific by 46%, while European turnover was up by a more modest 9.4%. Aegis said that the European market had been more disappointing, with gains in some markets offset by weakness in others.

In the Americas, turnover for the six months ending June 30 2003 was up by 13.6%, compared with the first half of last year. Turnover for the entire Aegis Media division rose by 11.6% to £3.4bn.

It was not all good news for the company, with Carat forced to close its Venezuelan operation owing to political and economic problems in the country. However, in troubled Argentina, the first signs of economic recovery were being seen, with Carat adding Telecom Argentina to its client roster.

In the US, client spending was improving at a "gentle pace", Aegis said. New client wins in the US include Pharmacia and XM Radio. In Europe, account wins included the fashion brand Diesel and dairy brand Arla.

Doug Flynn, chief executive of Aegis, said that the company had improved revenues in media and research, despite what he described as patchy conditions.

"This has been one of the busiest periods in the company's recent history and in addition to improved results we launched a new media network, consolidated our buying power, internationalised our interactive media network and rebranded our research business," Flynn said.

Aegis' research division, Synovate, also recorded an increase in revenues, up by 4.8% to £93.5m.

Aegis said that the global advertising market showed a slight recovery in the first six months of 2003. However, while noted signs from the US TV market were encouraging, it said other forms of US media were showing little improvement.

It said that the Japanese market remained flat while adspend in the rest of the Asia-Pacific region returned to solid growth after the SARS-affected second quarter.

"While the second half of the year may see slightly better market conditions, it is likely that the 2003 will show only a slight recovery. The seasonality of our business continues to become more pronounced, mainly as a result of performance-related revenues released towards the latter part of the year. If the present market conditions continue we would expect that the group will deliver satisfactory results for the full year," Aegis said in a statement.

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