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.<br /><br />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.<br /><br />The group said the rate of cost cutting continued to accelerate and that it had saved nearly &pound;37m in the year, with &pound;24m coming from its media space planning and buying division, Aegis Media. <br /><br />Several of Aegis&rsquo;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.<br /><br />&ldquo;We are not changing our targets,&rdquo; he added.<br /><br />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&rsquo;s, Credit Agricole and Nokia.<br /><br />&ldquo;The results after nine months trading and current revenue and cost trends allow us to reconfirm the guidance given at the half year stage,&rdquo; it said, refering to the&nbsp; market consensus for full-year underlying pre-tax profit of &pound;136m to &pound;146m.