Aegis Group, owner of Carat and Vizeum, is likely to post an increase in pre-tax profit for last year but its exposure to the US motor industry leaves 2009 earnings vulnerable, according to analysts.
The marketing services group reports full year preliminary results tomorrow (March 19) with analysts forecasting pre-tax profit of £145m to £150m, up from £132.7m in 2007.
In a research note, Numis Securities says it expects trading to have “deteriorated” in the final quarter of 2008 but that its geographical diversification means it will benefit from a weak sterling.
Alex DeGroote, media analyst at Panmure Gordon , says “over exposure” to US auto within its Synovate market research arm and the general outlook for marketing services could result in a 10% earnings per share slump this year.
Analysts are also looking closely at the plans of interim chief executive John Napier (pictured) who took over in November after the abrupt departure of Robert Lerwill amid rumours of a boardroom fall-out.
There will also be focus on Aegis’ plans to spin-off Synovate or for closer ties with its largest shareholder and chairman of rival Havas Vincent Bolloré.
DeGroote says a Synovate sale at around £330m is a “clear possibility”.
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.