• by Paul Gough , January 5, 2004

Carat North America's parent company opened the new year by proclaiming that its revenues were "well ahead" of 2002's levels in a statement issued three months ahead of its official release of 2003 earnings.

Aegis PLC - the London-based holding company that owns Carat and research firm Synovate and is the world's largest pure-play media agency - told investors that its media operations were performing well. In 2003, Aegis said the global advertising market rose by 3.2 percent and the U.S. market grew by 3.4 percent.

"Despite some pressure on fees in new business pitches, the division has shown good revenue growth through developing new and existing client accounts," the statement said. That revenue growth was expected to increase in 2004, which Aegis predicted would improve on 2003. Aegis said the U.S. advertising market would grow by 4.7 percent, thanks to increased spending on the Summer Olympics in Athens, the presidential election, and the steadily growing confidence of corporate America. The global advertising market would increase by the same amount, led by 6 percent growth in Asia-Pacific and 3.6 percent in Europe, which had been lagging.

"The group is in a sound position to make further progress in 2004," Aegis said. "The marketing environment is expected to show some improvement, and this will also assist the Group's financial performance." In September, Aegis said its first-half revenues increased 7.8 percent to $468.5 million. It had $238 million in new billings from the United States and Latin America in the first half of 2003, compared to $679 million in the first half of 2002.

Aegis' statement from London on Monday morning put to paper what Doug Flynn, chairman and chief executive officer, told investors across the pond at two conferences last month in Manhattan. Flynn said in early December that there's definitely a turnaround in the United States, but that improvement had been happening much slower in its biggest market, Europe.

"Things are looking a little better," said Flynn. "It's a slow, somewhat uncertain climb."

Aegis said Carat was showing good growth in North America and Asia-Pacific, as well as meeting its targets in Europe. Another Aegis media services unit, Vizeum, had performed to expectations in its first six months of operations. It said communications services - including outdoor, sponsorship, data analytics, and interactive - was helping it weather the storm on fees. On Monday, Aegis said its research division had started to improve as well.

"After a tough two years, Synovate made a good recovery in North America and is improving both revenues and margins," Aegis said. Aegis did not release any data on research revenue in December or on Monday, but had said earlier that growth would be around 2 percent worldwide.