Aegis profits dive after higher costs
LONDON - Aegis, the global media and market research group, has reported an 86% drop in first half pre-tax profits to £6.6m despite growing revenues by 4.8%.
The company, which owns Aegis Media and Synovate, suffered a 10.4% drop in billings to £4.8bn, which it attributed to media deflation as well as client budget reductions, and a 10.8% drop in organic revenues.
It expects market conditions to remain difficult but said Aegis Media has made "significant new business wins", which include Nokia's £300m global media planning and buying account, placing it in a stronger position for the second half.
While revenues increased 4.8% to £636.7m, pre-tax profits fell due to rises in operating expenses, restructuring charges and finance costs.
Aegis spent £15.7m on restructuring charges following chairman and interim chief executive John Napier's drive to make its operations more efficient and flexible.
Napier said: "We developed a clear strategy to perform resiliently in a downturn, which has delivered in more difficult market conditions than forecast."
The company's share price was steady in early trading this morning at 98.75p.
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