Aegis profits shoot up ahead of Dentsu sale but ad spending forecasts are cut

ADVERTISING firm Aegis said new contracts including a lucrative deal with General Motors led to a 20 per cent rise in first-half profit, in what is likely to be the company’s last earnings report before it is sold to Japanese giant Dentsu.

Chief executive Jerry Buhlmann said the results continued Aegis’s “considerable positive momentum” although he did warn that advertising spend would not grow as fast as previously thought.

Aegis subsidiary Carat cut its ad spend growth forecast for this year from six per cent to five per cent, and said online spending would overtake newspaper ad sales next year to become the second-biggest advertising market after TV.

Aegis, whose £3.2bn sale to Dentsu was overwhelmingly approved by shareholders last week, said revenue rose 15 per cent to £596.8m and profit before tax was £87m.

The agency said the acquisition is expected to be completed in the fourth quarter of the year subject to clearing a number of competition hurdles.