UK's marketing groups report mixed fortunes

The UK's publicly quoted marketing services groups turned in a

mixed performance last year, according to a survey due to be published

this week.

The survey of last year's financial performance, which is unveiled in

the newsletter Marketing Services Financial Intelligence, will show

extensive revenue growth being offset by static operating profit


Most concern will be felt by the shareholders of Aegis Group, which saw

its profit margin shrink from 23.6 per cent to 22.1 per cent.

As a group, the holding companies posted a massive 48.7 per cent overall

revenue increase, boosted by a string of acquisitions during 2000. Sir

Martin Sorrell's WPP Group enjoyed by far the largest revenue, with

gross income rising 47.5 per cent to pounds 2,376 million, buoyed by one

quarter's income from Young & Rubicam. However, the acquisition of Y&R

served to restrict WPP to a 0.2 per cent improvement in operating

margin, to 14.4 per cent.

Incepta Group, which operates a number of businesses below the line, had

the year's largest increase in revenue, with income rising 98.6 per cent

to pounds 153.3 million.

Aegis' fellow media specialist Tempus also saw its profit margins slip,

from 13.3 per cent to 13.2 per cent. In contrast with Aegis, however,

Tempus enjoyed a significant increase in post-tax profits.

'Both Aegis and Tempus have diversified into research and value-added

services,' the report's compiler, Bob Willott, said. 'It could be that

media buying groups are having to suffer a drop in margins due to client

pressure in that area and also their own policy of acquiring other


Willott added that, overall, the results could show marketing groups

entering a vulnerable time at the end of a boom period.


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