Aegis reports small rise in profits as buying suffers in Europe
LONDON - Aegis Group, the media company believed to be the subject of takeover interest from Havas, has said its first-half pre-tax profit rose to £36.9m from £35.4m last year as its buying services remain mixed in Europe.
Aegis' performed well in areas such as digital, communications planning, event marketing and outdoor, bolstering overall group revenue by 14% to £389m.
Media buying services remained mixed across Europe with traditional media buying rates under pressure, the group said.
Its main media planning and buying network Carat France was still recovering from client losses in 2004 while Germany had a flat performance in the first six months to June 30.
In the US, Carat had a good first half as a result of strengthened communications planning, while Asia Pacific continued to show strong growth, the company said.
Aegis' media network Vizeum achieved good business growth with a number of significant client wins including Bosch, Paramount Pictures and Reebok. In total, Aegis' media revenues were up 13% to £244.2m from £216.1m a year earlier.
Aegis said that the first six months of 2005 have been characterised by a switch in the allocation of budgets away from conventional broadcast and print media towards interactive and out-of-home media.
This has led to its digital agency Isobar contributing over 13% of Aegis' media revenues in the first half, which it said it expects to rise for the full year and in the future.
Its market research business Synovate performed well with organic growth at 12.2% -- double the market growth.
Robert Lerwill, chief executive of Aegis Group, said: "Synovate, our research business, is carrying forward a comfortably higher order book than last year and our digital media network, Isobar, is achieving rapid and successful growth. I am confident Aegis will once again deliver a satisfactory performance for the full year."
Aegis also revealed its global adspend forecasts, with Carat upgrading its global expenditure forecast to 5.2%, primarily driven by growth in Asia, which it expects to overtake Europe in terms of spend by 2008.
Carat has lowered its 2005 European forecast by 0.4% to reflect the softer performance in the UK, Germany, France and Italy, although adspend remains strong in the Nordics and Central Europe.
It has been widely reported Havas chairman Vincent Bollore, who has a reputation as a corporate raider, has Aegis in his sights, having gone on a share-buying spree to acquire over 6% of the company. It is believed he wants to merge Aegis with Havas to strengthen their position against WPP, Publicis, Omnicom Group and Interpublic Group.
It also emerged this week that Omnicom had made an informal offer for Aegis last year, valuing the company at £1.4bn, but it was rejected.
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