Aegis profits up but staff cuts go ahead

Aegis Group, owner of Carat and Vizeum, has posted a 25.6% rise in pre-tax profit to £166.8m in its 2008 full year results this morning (March 19).

The marketing services group says Carat UK contributed significantly to the rise, with wins including Coca Cola Company, AA and Telegraph Newspapers helping to boost its Aegis Media Europe, Middle East and Africa revenues by 24.8% to £588.1m.

The group says its success in retaining Disney in Europe, and Santander in the UK also helped keep the region’s profits healthy even though 2008 was a “relatively quiet year for new international pitch opportunities.”

Synovate EMEA gross revenues were also up, rising by 20.3% to 248.34m, despite the “disruption” caused by its integration into a single site in the UK. Both businesses EMEA performance offset weaker US performance which saw a profit loss for Carat US, caused in part by the loss of car client Hyundai.

Interim chief executive John Napier’s statement focused on cost cuts but did not hint at a sale of Synovate, floated by analysts as a possibility in addition to possible closer ties with its largest shareholder and chairman of rival Havas Vincent Bolloré.

Napier (pictured), who took over in November after the abrupt departure of Robert Lerwill amid rumours of a boardroom fall-out, did say the group was addressing its “tendency to develop capacity in advance of revenue” and “weaker market conditions on 2009” with the “regrettable but necessary” 5% reduction in its global headcount.

Earlier this month, rival WPP reported group revenue increased 2.7% on a like for like basis last year while rival Interpublic Group reported organic revenue growth increased 6.2% in 2008 and Publicis Groupe reported a slight 1% rise in group revenues last year.

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