Aegis To Shed 780 Jobs, Denies Merger Rumours

British marcoms group Aegis - which owns market research firm Synovate - has announced plans to cut around 780 jobs across its global operations as part of a cost-saving plan to beat the downturn. Meanwhile CEO John Napier denied reports he has held merger talks with competitor Havas.

While Aegis' reported pre-tax profits were up 25.7% to £166.8m in 2008, after reorganisation the figure fell 5.4% year-on-year to £124.6m.

To counter this, Napier said he has positioned the group for a tough environment with a cost-cutting programme that includes making 5% of the16,800 workforce redundant in 40 countries; across Synovate, Aegis Media, and the head office.

On the possibility of divesting Synovate, Napier would only say he had been busy getting the company in shape since taking over at the end of November.

Asked whether he had discussed a merger with Havas owner Vincent Bolloré, a major shareholder in Aegis, Napier said: 'As far as these Havas rumours are concerned... they haven't actually come up in discussion between Mr Bolloré and myself.'

Napier also confirmed that Bolloré would not put forward any candidates for two vacant non-executive board positions.

At the research company, gross revenue was up 19.7% to £518.2m (10.3% at constant currency rate), and net revenue increased 20.5% to £329.2m (11.3% at constant currency rate). Of the 11.3% increase, 5.1% was organic, with the balance from acquisitions.

Operating profit at £42.2m was up 20.9% (13.1% at constant currency), and operating margin remained at 8.1%. Efficiencies from offshoring data collection, particularly in North America, resulted in a net revenue margin of 63.5%, up from 63.1% the previous year.

'I am happy with the 2008 numbers and the progress made to date,' said Napier. 'I believe we have positioned the company well to respond to challenging market conditions. We are tightening up our organisation and have the management capability to react to market opportunities in adversity. We expect to produce a resilient performance in more difficult market conditions.'

Napier added that Aegis should announce a new CEO by end-2009, but confirmed that he is not interested in the job himself on a permanent basis.

Shares in Aegis were up 1% by mid morning at 76.25 pence.

Web site: www.aegisplc.com .