Marketing group Aegis beat forecasts yesterday despite suffering a £25m exceptional charge on the threat of bad debts from a Spanish former client.
The debt provision pushed its pre-tax profits down 25 per cent from £91.2m to £68m but chief executive Jerry Buhlmann told City A.M. his firm had taken a “very prudent” view on this, with the firm still working to recover the money.
Organic revenue grew 5.8 per cent year-on-year to £1.45bn, with underlying pre-tax profits up seven per cent to £162m.
The strong results followed a rebound in advertising markets in the second half of the year.
Buhlmann said the business performed particularly well in the US and Asia. The firm has increased its operations in Asia with the recent acquisitions of Australian marketing group Mitchell and Chinese media agency Charm Communications.
It has also expanded its presence in Russia and China.
Buhlmann said he is “upbeat” about the outlook for 2011, saying he is confident the forward momentum will continue. It increased its dividend 10 per cent to 2.75p.
The results followed similar improvements at other global ad groups such as WPP, Omnicom and Publicis, which all reported strong ends to the year due to growth in the US and emerging markets.
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Operating profit was up 12.9 per cent to £192m, but pre-tax profit fell 25 per cent to £68m.
The group, which has expanded in emerging markets, says its outlook for 2011 is positive and raised its dividend 10 per cent to 2.75p.