London-headquartered international media buying specialist Aegis Group, parent of the Carat network, sees little jollity in 2002 for the world’s advertising community. “Although there may be some recovery in adspend in Q3 or Q4, it is expected that, for the full year, growth will be flat to negative,” it gloomed.
The forecast, covering both the media and ad hoc market research sectors, accompanied Monday’s trading update in advance of the agency’s preliminary results due March 12.
The crisis in Argentina will also impact adversely on its results, warned Aegis, which expects to write-off around £10 million ($14.4m) mainly related to its activities in that country – its primary South American market. Also included in the 2001 write-off are downsizing costs associated with redundancies and closures.
Merrill Lynch promptly downed its forecast for the group’s full year pre-tax profits from £54.5m to £47m – although investors, seemingly relieved that the gloom was not unalloyed, chose to regard the Aegis statement as an indicator that the advertising downturn had bottomed-out.
Indeed, Aegis even permitted itself a smidgen of cautious optimism: “The level of pitch activity in the market has remained subdued for much of the year, but there now appears to be a modest increase in the number of new business opportunities in which Carat is actively participating.”
The London stock market, apparently indifferent to the Aegis statement, saw its shares blip by a minuscule £0.0025 to £1.025 in early Monday afternoon trading.
News source: Financial Times