Aegis pre-tax profits slump 86 per cent; mulls cost-cutting

The UK  marketing and advertising group Aegis Media is speeding up its cost-cutting plan after the company reported an 86 per cent decline in pre-tax profits in first half of 2009 to £6.6 million.

The company's pre-tax profits were down from £47.4 million last year but stripping out restructuring costs and financial costs, profits for the six months to the end of June were £43.5 million, down from £56.2 million.

After tax the firm made a net loss of £0.4 million, down from a £3.6 million profit last year.

Although its sales rose 4.8 per cent to 636.7 million pounds ($1.04 billion) from 607.6 million pounds a year earlier, stripping out the effects of currency movements revenues were down 9.2 per cent, with like-for-like revenues down 10.8 per cent.

"In general, the group revenue decline was greater in the first quarter and slackened in the second," Aegis chairman and chief executive, John Napier,  said; he however stressed that "we don't want this to be interpreted as a form of surge upwards. There is no rebound."

Aegis, which owns media-buying operation Carat and digital agency network Isobar, blames a sharp downturn advertising for the debacle; the company failed to rein in costs fast enough, especially at its Synovate market research business.