Aegis Reports Weak Results, Shares Are Battered

Aegis Group, the London-based parent of Carat, Isobar, Posterscope and other media networks, this morning reported weaker than expected results for the first quarter of 2009, sending its already volatile share price down in reaction. Pro forma revenues fell 11.6% vs. the first quarter of 2008, including a 13.1% decline at Aegis Media.

Aegis' management team attributed the results to weak comparisons with an "exceptionally strong" first quarter of 2008, when Aegis Media's revenue soared 29.9% year-over-year, and Aegis' Synovate division rose 16.5%.

"Against these unusually high comparatives, group revenue in the first quarter of this year was 6.5% ahead, including a significant exchange rate benefit," the company noted, citing the affect of currency and other factors.

Aegis' management attributed about half of the organic decline to developments within Aegis Media, including client losses at Carat in the U.S., and Renault in EMEA.

Those losses were offset partly by net new business wins of $1.05 billion during the first quarter, including accounts from Kellogg's, Vodafone and Credit Agricole, which won't begin to benefit Aegis Media's results until the second quarter of 2009, and should begin to offset the other losses for the balance of the year.



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