Group Press Releases
Interim Management Statement
19 November 2009
Review of results
In our Interim Results Announcement on 28th August, we stated in the outlook section that:
- We were not forecasting any upturn in the second half;
- The cost reduction programme was delivering increasing cost savings quarter by quarter;
- Synovate's results were expected to improve; and
- We were confident the full-year underlying profit outturn would be in line with market expectations
The results after nine months trading allow us to reconfirm the guidance given at the half year.
Total Group revenues for the first nine months of the year are up 1% on 2008 on a reported basis, a performance achieved against high prior year comparatives when Aegis Media revenue was up 26.1% on 2007 and Synovate gross revenue was up 12.8%.
Taking account of the effects of currency movements and acquisitions, Group organic revenue was down by 10.8% compared to prior year, in line with the trend for the first half. The split was 10.4% at Aegis Media and 11.5% at Synovate.
In Aegis Media, new business momentum remains strong going into Q4 and 2010, with year-to-date net new business wins of $2.4 billion (2008:$1.0bn), including Kellogg's, Beiersdorf, Credit Agricole, Société Générale and Nokia.
In Synovate, the trend in revenue and sales improved with a continuing strong sales order book at the end of the third quarter.
The rate of delivery of savings from our targeted cost reduction programme has continued to accelerate in the third quarter. The percentage movements for the third quarter are compared below to the numbers provided in our interim presentation.
| Q1, % | Q2, % | H1, % | Q3, % | Sept YTD % | Sept YTD £m | |
| Aegis Media | 2.2% | 7.0% | 4.6% | 10.1% | 6.4% | £23.9m |
| Synovate | 0.7% | 7.8% | 4.3% | 10.8% | 6.5% | £11.1m |
| Group | 2.0% | 7.5% | 4.8% | 10.5% | 6.7% | £36.7m |
The table above shows year-on-year percentage savings in total staff costs (excluding bonus and severance), stated at constant currency. The Group total also includes head office staff cost savings.
The increased cost savings in the third quarter include the benefit of further initiatives. As a result, the related one-off costs in the second half will increase to an estimated £16m - an addition of £6m to the top end of the £5m - £10m range given at the interim results. We remain well on track to secure payback within 18 months.
Our financial position remains strong. At yesterday's close of business, we had committed headroom of £160m within our central facilities. We have no material refinancings prior to June 2011.
Outlook
The results after nine months trading and current revenue and cost trends allow us to reconfirm the guidance given at the half year stage that we expect a full year underlying profit outturn in line with market expectations.
John Napier, Chairman and interim Chief Executive Officer, said:
"Our strategy to perform resiliently in a downturn has continued to deliver and we are pleased to confirm further progress in a difficult and challenging market environment."
For further information please contact:
| Aegis Group plc +44 (0) 20 7070 7700 |
| John Napier, chairman and interim chief executive officer |
| Nick Priday, chief financial officer |
| Tulchan +44 (0) 20 7353 4200 |
| Susanna Voyle |
| Tom Rayner |
