The first half performance came despite a tough advertising economy in key markets, as well as significant client losses and a reorganization of its flagship Carat unit in the U.S., and CEO Robert Lerwill warned of weaker results for the second half of 2008.
Aegis first half performance came, in large part, from the continuing surge in demand for digital media services, and the company reported that digital revenues now account for 29% of Aegis total, up from 26% in 2007, 20% in 2006, 15% in 2005, and 7% in 2004.
Aegis' digital media expansion was accelerated by 14 acquisitions during the first half, with a particular focus on fast-growing search engine marketing services within Aegis Media, and the company said its worldwide digital media organization now totals 3,300 worldwide, making it the largest provider of digital media services in the world.
As a result, Aegis Media's organic revenues grew 10.0%, outpacing those of the total company's 8.2% organic growth rate, and Aegis' relatively tepid 4.9% forecast for the global advertising marketplace. Aegis Media also reported operating margins of 17.1% during the first half, and improvement from 16.9% during the first half of 2007, and much higher than the company's 10.7% overall margin for the first half of 2008.
"We achieved these results despite a trading environment that is becoming tougher - with signs of slowing demand, particularly in Spain, the U.S. and the U.K.," Lerwill stated. "Consequently our revenue outlook for the second half of 2008 is less certain. We anticipate a lower rate of market growth than in the first half and are therefore taking some early steps to tighten our cost base in a number of markets. Nonetheless, we remain confident of delivering a result for the year at the upper end of market expectations."