Aegis insists it’s resilient as revenues fall
SHARES in marketing and communications group Aegis fell 4.6 per cent yesterday, after it said that its core revenue was down 11.6 per cent in the first quarter due to client losses and tough market conditions.
But the group said it is well-positioned to “produce a resilient performance in difficult market conditions” – with $1.05bn (£690m) of new business from Kellogg’s, Vodafone and Credit Agricole set to offset the impact of the earlier losses.
Aegis said the organic decline – an industry metric which strips out acquisitions and the effects of currency – reflected tough conditions brought on by the global downturn.
The company said that Aegis Media, which includes the media-buying agency Carat, saw a year-on-year fall in revenue of 13.1 per cent – while revenue at its market research arm, Synovate, dropped 12 per cent in the period.
But group sales in the period, including a significant exchange rate benefit, were up 6.5 per cent.
Aegis chairman and interim chief executive officer John Napier said the company is “on track” to deliver the £40m cost savings it announced in March – when it revealed plans to cut five per cent of its global workforce.
UBS said the organic decline was more than three per cent worse than any other comparable rival.
“Overall we believe consensus revenue forecasts are likely to move from around six per cent lower for full year 2009 towards 10 per cent lower, which could drive close to double digit earnings downgrades,” UBS said in a note.
Shares in Aegis closed d 4p lower at 83p.
The group is 29.9 per cent owned by Vincent Bolloré, the chairman of French agency Havas – which reported a first quarter organic revenue fall of 8.4 per cent last Friday.