UK-based media buyer Aegis raised global advertising forecasts for 2010 by a third to 3.9 per cent after reporting 3.2 per cent organic revenue growth for the six months to end-June.
Aegis believes global economies are recovering faster than expected, a view echoed this week by WPP, the world's biggest advertising agency. Investors are promised even greater organic growth in the second half, based on accelerating quarter-on-quarter trends that show a 1.1 per cent increase in the first quarter jumping to 4.7 per cent in the second three months, after Aegis picked up new clients, including China Telecom, Kraft-Cadbury and Kelloggs.
Broker Altium expects to raise 2010 EPS estimates of 9.8p on £162m of pre-tax profit over the coming days (9.6p and £150m in 2009).
Asia Pacific was particularly strong, with revenue rising 18.4 per cent, and the region accounted for almost 18 per cent overall income in the half. Higher spend on market research by corporates helped the Synovate unit return to the black to the tune of a £4.7m operating profit.
Underlying pre-tax profits rose 8.3 per cent to £48.3m, after goodwill impairments and restructuring costs, while the balance sheet has been shored up by April's £191m convertible bond and new £450m five-year credit line.
AEGIS (AGS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 111p | MARKET VALUE: | £1.3bn | |
| TOUCH: | 111.2-111.3p | 12-MONTH HIGH: | 137p | LOW: 98p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 39p* | NET DEBT: | 86% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 637 | 6.6 | -0.2 | 0.96 |
| 2010 | 663 | 25.3 | 1.2 | 1.03 |
| % change | +4 | +283 | - | +7 |
Ex-div: 8 Sep Payment: 24 Sep *Includes intangible assets of £1.1bn, or 95p a share | ||||
