Global media and market research network, Aegis Group, this morning reported a strong performance at its media buying agency, Carat, which managed to build market share and report some positive organic growth, despite the prolonged depression in advertising conditions.
The group says that there have been some signs of an advertising recovery in the US, but few indications of improvement across Europe, which reported negative growth for the first half period. Turnover at the group rose by 2.1% to £3.1 billion, whilst revenues grew by 10% to £273.3 million, on organic growth of 0.5%.
Underlying pre-tax profits were more or less flat, up from £27.2 million in H1 2001 to £27.5 million this time. Net new business wins were strong, with net gains of $1.1 billion – slightly down on the $1.2 billion of H1 2002.
Outlook The strong upfront markets in the US have pointed toward the beginnings of a strengthening media sector there, whilst Europe, which entered the downturn six months after the US, is showing no signs of such a pick-up.
Analysts at ABN Amro say that this cautious message from Aegis reflects the lack of visibility media companies are currently subject to and is in line with comments from other agencies.
Forecasts Aegis has upgraded slightly its US and Asia forecast and has reduced the figures for the European market for 2002. European growth has been reduced from -2.0% in the March forecasts to -2.7% in the new figures. North America is raised from -0.4% to 0.2%.
Commenting on the period, Doug Flynn, chief executive of Aegis Group, said: “This has been a longer and deeper advertising recession than anyone predicted. The US advertising market began to show some tentative signs of recovery in the first half of the year, however the European market was down. The continued depressed market conditions have affected profitability. Nevertheless, the Group has continued to show organic growth in a global market that has contracted.”
