Group Press Releases
Chairman's AGM Statement
14 June 2006
The following is an extract from the Chairman's statement to be givenat today's annual general meeting of Aegis Group plc.
Trading in the year to date has been broadly in line with our expectations. We are delivering solid growth at both Aegis Media and Synovate, with total group revenues for the first quarter up 22%, and organicrevenue growth of 6.1% (5.8% in Q1 2005).
Aegis Media
In Western Europe, we are continuing to see some signs of improvement in trading conditions in France and Germany, although the UK market has proved less robust than expected. In the Americas and Asia-Pacific,we continue to gain market share.
Isobar has continued to achieve the strong organic growth we delivered in 2005 as demand for digital marketing services accelerates. We have put in place the most highly developed client support resource of any international digital marketing business, to ensure coordination and delivery of services across the global Isobar network, and we believe that this will contribute to further growth in our digital revenues.
In the first quarter of 2006 we grew total revenues at AegisMedia by 14% and by 5.0% organically.
Net new business won in the first quarter amounted to $655m, up $230m on the first quarter of last year and included Intercontinental Hotels in Europe and the Middle East; the Italian national railway, FSS; Tracphone in the US; and Luxottica internationally. Wins since then include the worldwide consolidated media business of adidas-Reebok; the return of Afflelou from KR Media in France; and Gap in the US.
Synovate
We continue to outperform the global market research industry, underpinned by Synovate's global approach, our specialist practices (with Synovate Healthcare and Synovate Aztec performing very strongly) and a focus on efficient operations. The integration of acquisitions made in 2005 has gone well, and we are seeing benefits from investment in restructuring and integration made in the year. In the first quarter, Synovate grew revenues by36% in total and 7.8% organically.
Interim Results
The results for the half year to 30 June 2006 will be announced on 5 September 2006. These are expected to show good progress, reflecting both continued strong organic growth and the benefit of acquisitions.
We are seeing a continuation of the trend of recent years towards increasing seasonality in our businesses. As a result of this, we expect to generate a higher proportion of trading profit inthe second half of this year, compared with previous years.
As previously indicated, the finance charge will be higher than in the same period last year. This is due to higher borrowings relating to acquisitions made in the past year; the write-off of capitalised financing costs following the refinancing of our revolving credit facility and convertible euro loan note; and the decision taken in 2005 to move from floating rate to longterm fixed rate debt.
Outlook
2006 has got off to a good start, with the trends seen in the first quarter continuing. At Aegis Media we are seeing further benefits from our digital investment and our integrated approach to media communications. Synovatecontinues to outperform the market by a clear margin.
Based on our performance to date and what we know of the market outlook and prospects ahead, we remain confident of achieving good results for the year as a whole.
For further information contact:
Charlotte Elston
Aegis Group plc
+44 (0) 20 7070 7708
Tim Spratt
Financial Dynamics
+44 (0) 20 7831 3113
