Aegis profits surge after Synovate disposal

By Daniel Farey-Jones, mediaweek.co.uk, Thursday, 15 March 2012 07:30AM

Media buying and digital marketing group Aegis has reported a threefold surge in statutory pre-tax profits to £106.4m for the year to 31 December 2011.

Aegis radically slimmed down and refocused in July last year with the £525m sale of its research division Synovate to Ipsos of France.

The disposal left the UK-based group with media agencies Carat, Vizeum and Posterscope and digital businesses Isobar and iProspect.

Stripping out Synovate’s contribution, Aegis last year recorded a 20.6% lift in annual revenues to £1.14bn and a 32.3% rise in underlying pre-tax profits to £161.8m.

Aegis had recorded £1.46bn revenues and £68m pre-tax profits, including Synovate, during 2010.

The group claims it equalled its own record for net new business with a figure of $2.7 billion in 2011.

Its impressive organic growth of 9.9% beats the marketing services industry’s bigger fish, which offer a wider variety of services.

They were bunched together in a range between 6.1% and 5.3%, with US groups Omnicom and Interpublic experiencing the fastest growth and the UK’s WPP the slowest.

Jerry Buhlmann, CEO of Aegis Group, said: "We completed 18 acquisitions and investments in 2011, and they have improved our core capabilities and positioning in a number of key geographies.

"We are optimistic about the outlook for the advertising sector in 2012, supported by key sporting events and the US Presidential Elections, and we anticipate further success for the Group in the year ahead and beyond.

"We expect to continue delivering sector-leading organic revenue growth which we expect to convert into further margin progression and earnings enhancement for our shareholders over time."

Aegis chalked up a big deal in the world’s biggest ad market with the acquisition of US digital agency Roundarch three weeks ago.

The addition to Isobar North America is expected to cost around $250m, and a maximum $360m, over five years.

A month earlier it recorded what Buhlmann called "the most significant new business win in Aegis Group’s history" with Carat’s triumph in the $3bn General Motors global media buying review.

On a conference call about the results this morning, Buhlmann cited the win as evidence the group could develop a relationship with clients at the top level.

The company’s share price has been on an upward trajectory since its 12-month low of 122p in November.

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This article was first published on mediaweek.co.uk