Aegis Group, the global media network which owns the Carat agency, today posted a 12.7% rise in underlying pre-tax profits for 2003, with media turnover rising by 15.0% £6.9 billion.
Aegis chief executive Doug Flynn says that the results have been achieved despite challenging market conditions thanks to action taken by the company over the last few years.
“While we were helped by a modest improvement in our markets in the latter stages of 2003, this performance has been due primarily to our steady investment in the business throughout this industry’s deepest marketing services recession,” said Flynn.
At Carat, trading was up in the US and buoyant in Asia-Pacific, but the slower European markets held back growth. International business now accounts for almost 50% of Carat’s business and reflects the continuing trend for clients to award international briefs.
Despite the poor market conditions prevailing in Europe in 2003, Aegis says that Carat Europe maintained a good flow of new client wins during the year.
Advertising forecasts Aegis says that advertising is now back into the cycle of positive growth and this, coupled with investment initiatives, should lead to continued benefits for the company throughout 2004.
The group says that the advertising recession, which ended in the US and Asia in 2003, is now largely over in Europe, although France and Germany are set to recover at a slower rate. Clients are now indicating their intention to invest in top line growth on the back of rising corporate confidence.
In 2004 advertising growth is being driven by the ‘quadrennial effect’ of the US election, the Olympics and the European soccer championships; combined, these are predicted to add 0.9% to global adspend. Aegis forecasts that global ad expenditure will rise by 5.3% in 2004; the US market is expected to grow by 5.3%, with Europe rising by 4.0% and Asia-Pacific up by 6.1%.
Acquisition of Symmetrics The company also announced this morning that it is to acquire Symmetrics Marketing Corporation (SMC) – a US-based customer satisfaction measurement company – for an initial sum of £2.9 million in cash.
Depending on the performance of SMC over the next three years, Aegis may pay an additional sum of up to £5.5 million for the group. For the year ended 30 June 2003 Symmetrics had revenues of £8.3 million.
Shares in Aegis Group were down by 2.5% at 107.25p by mid-morning today.
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