Aegis Revenue Rises Amid Forecast Concerns

UK marcoms group Aegis has posted revenue growth of 21.8% to £607.6m for the first nine months of the year, but says that the negative outlook for the global economy makes it difficult to predict accurate levels of client spend for the fourth quarter - its most significant trading period.

Operations at research arm Synovate were in line with the first half of the year, with overall revenue growth up 12.8%.and organic revenue increasing 4.9% for the first nine months.

After a difficult first half in US Healthcare, Synovate has seen growth in the third quarter. This was offset by weakness in ad hoc projects in the automotive sector, and a more 'difficult environment' for retail, hospitality and food and beverages, which resulted in negative organic growth in North America.

Elsewhere, organic growth was good across most of Asia-Pacific, Central and Eastern Europe and the Middle East.

Western Europe remained more difficult, particularly in Spain, which the firm says reflects the wider economic climate, and in Germany where revenue from automotive clients came under pressure.

For the first nine months of the year, organic revenue growth at Aegis Media was up 8.8%. While the division saw double-digit organic growth in France, Germany, Italy, Central & Eastern Europe and the Nordics in the month of September, the firm said that demand in the US, UK and Spain had slowed down in the third quarter, reflecting 'difficult market conditions'.

'We achieved these results despite a trading environment that is becoming tougher,' stated CEO Robert Lerwill. 'Consequently our revenue outlook for the second half of 2008 is less certain. We anticipate a lower rate of market growth than in the first half and are therefore taking some early steps to tighten our cost base in a number of markets. Nonetheless, we remain confident of delivering a result for the year at the upper end of market expectations.'

Aegis share price fell by 13% in early morning trading, but recovered to 59.25p; a drop of 7%.

Web sites: www.aegisplc.com and www.synovate.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.