’07 Profit, Revenue Up at Aegis

NEW YORK London-based Aegis Group, parent of Carat, reported a 14 percent rise in pretax profit to nearly $265 million on an 11 percent gain in revenue to $2.2 billion in 2007, compared to the previous year.

Aegis reported organic revenue growth of almost 10 percent and said digital services now account for more than 25 percent of its total revenue, up from 20 percent in 2006. The company said it generated net new business of $1.7 billion in 2007.

Account highlights for the year included winning Twentieth Century Fox media planning outside the U.S. (through Carat sister shop Vizeum) and the Johnson & Johnson media assignment for the region covering Europe, the Middle East and Africa, overseen by a special Aegis media team. Carat also won the global Mattel account.

Worldwide, Aegis’ media revenue grew 13 percent to $1.3 billion.

Aegis Media Americas posted revenue growth of 16 percent to $304 million with strong growth in Mexico, Argentina, Brazil and Canada. U.S. business also “grew well,” the company said, driven by strong digital growth and “another good year in out-of-home, sponsorship and entertainment marketing.”

While Carat USA showed some growth, Aegis said revenues and profitability were impacted by the reduction of two major client budgets at the end of 2006. The clients weren’t identified, but it was around that time that it lost global duties on the $400 million Pfizer Consumer Care account, which was sold to J&J. It was also around that time that then-client Hyundai sharply reduced its local spending budgets.

Looking ahead, Aegis said that while 2008 so far has been “healthy across the group…in light of greater uncertainty about global economic prospects…we remain cautiously optimistic about the prospects for Aegis” for the full year. The company said it expected to exceed the industry average for organic growth this year for both its media services arm and research unit Synovate. The latter will be targeted for “further operating efficiencies,” the company said.