MediaVest predicts more pain as profits tumble
MEDIA planning and buying agency MediaVest has seen turnover and profits fall and it admits it expects to see further reductions next year.
Pre-tax profit stood at £6.8m down 12% for the year to the end of February 2009, from £7.75m a year earlier, according to the company’s latest set of accounts.
The company said it was “proud” of the “satisfactory result”, given market conditions.
Many of MediaVest’s clients have experienced significant pressures on sales, margins and hence marketing budgets, and media markets have seen dramatic downturns in demand, it’s director’ report said.
Turnover stood at £206m, down 10% on the £229.8m it made a year earlier. The report said: “In a year where certain media markets have seen up to 30% shortfalls in revenue year-on-year, we are pleased that our turnover, whilst showing a year-on-year decline, has proved resilient.
“A fall of 10% on the previous period is, we feel, a solid performance. As a cautionary note, however, we see further declines in the UK media market in the short term, meaning that further reductions in turnover are more likely than growth for the foreseeable future.”
The company added that its strategic focus on driving higher margin areas of our business activities has paid off, with gross profit relatively flat year-on-year at £19.6m compared with £19.9m.
MediaVest said the economic climate had a significant impact on its approach to managing the business, with it placing a greater emphasis on cash management during the year. Its year-end debtors amount stood at £19.7m compared with £33.4m a year earlier.
It said it had also bolstered its balance sheet because of the uncertainty of the economic climate and shareholder founds increased to £4.2m from £2.9m.
Management staffing levels were built back up to 54 over the year, having been slashed from 47 to 21, in the previous year’s accounts. The total number of employees increased by 22 to 216, with staff costs standing at £9.2m.
The group paid an interim dividend during the year of £3.2m. Since the year end the report said a £1m dividend had also been paid in June 2009.
