Cost cuts help Aegis through tough period
FTSE 100 media agency Aegis said yesterday that cost cutting allowed it to maintain full-year guidance, but that revenues continued to fall in the first nine months.
Aegis reported organic revenue down 10.8 per cent, with falls of 10.4 per cent at its Aegis Media marketing operations and 11.5 per cent at the market research division Synovate.
The group said the rate of cost cutting continued to accelerate and that it had saved nearly £37m in the year, with £24m coming from its media space planning and buying division, Aegis Media.
Several of Aegis’s peers have started to show a gradual improvement in organic sales but Numis analyst Paul Richards said Aegis would fare better in the fourth quarter and the following year when the comparatives improve.
“We are not changing our targets,” he added.
The group said Aegis Media had strong new business momentum going into the fourth quarter and 2010, with net new business wins from clients such as Kellogg’s, Credit Agricole and Nokia.
“The results after nine months trading and current revenue and cost trends allow us to reconfirm the guidance given at the half year stage,” it said, refering to the market consensus for full-year underlying pre-tax profit of £136m to £146m.