Group Press Releases
Aegis plc Pre-Close Trading Update
05 January 2004
Aegis Group plc (“Aegis”) the media and market research group, issues the following trading update ahead of its preliminary results announcement on 9 March 2004.
Trading
Aegis' 2003 trading is in line with expectations with turnover, revenue and operating profit all ahead of the same period in 2002. Effective cash management and favourable interest rates will help the Group attain a lower than expected interest charge.
Media
Aegis' media operations are performing well and, despite some pressure on fees in new business pitches, the division has shown good revenue growth through developing new and existing client accounts. Carat continues to show good growth in North America and Asia Pacific and is meeting budgeted targets even in the softer European market. Vizeum, the Group's newly launched media brand, has performed well in its first six months of trading and has developed a broad European presence with offices in 17 countries.
The Group is increasingly focused on providing integrated communications solutions for clients and is developing a range of specialised communications services, including outdoor media, sponsorship, data analytics and interactive media services – these services now account for around a quarter of media revenues. The growing contribution from communication services is enabling the media division to protect gross margins despite the pressures on fees noted above.
Research
Synovate, Aegis' research division, gained momentum and is now one of only a handful of research networks capable of providing marketers with a true global capability. The business is performing in line with expectations in 2003 and has demonstrated solid revenue progress.
After a tough two years, Synovate made a good recovery in North America and is improving both revenues and margins. The Asian business is recovering from the impact of SARS earlier in the year and is expected to deliver an increase in revenues compared with 2002. Europe remains a difficult market for research, but the increasing breadth of the network in the region is attracting business from new international clients.
Group Prospects
The Group is in a sound position to make further progress in 2004. The marketing environment is expected to show some improvement and this will also assist the Group's financial performance.
Market Outlook for 2004
Looking at the Group's market predictions for 2004, it expects a continued improvement in the advertising market with global adspend growing by 4.7% in 2004 (2003: 3.2%). The combined impact of the Olympics, the Presidential election and returning corporate confidence will help the US market grow by 4.7% (2003: 3.4%). Asia-Pacific is expected to grow strongly with adspend up by 6.0% (2003: 4.2%). Europe is forecast to grow by 3.6% (2003: 1.7%) as the market slowly improves.
