The World: Paris - Havas bosses confident of improving profits in 2007

Havas has blamed the cost of hiring new staff and modest revenue growth for the fall in its 2006 profits, but predicted its financial health would improve this year.

Operating profit dropped by 7.9 per cent to EUR140 million during 2006. The operating margin slipped to 9.5 per cent from 10.4 per cent in 2005.

Fernando Rodes, the Havas chief executive, said he expected underlying revenue growth to lift the group's 2007 operating margin to above 10 per cent. "We are waging a war on results, but it's not short term," he added. Vincent Bollore, the Havas chairman, said his "intuition" told him that "in terms of profitability, we could reach 12 per cent at some point this year".