Tight cost control helps MediaVest grow earnings

MEDIA planning and buying agency MediaVest has succeeded in increasing pre-tax profit despite an 18.5% fall in revenue.

During the 12 months to February 28 the Manchester-based group recorded profits of £7m, up 3.6% on sales of £168m, down 18.5%, according to newly-filed accounts.

In their report the directors said this was a significant improvement on last year’s 12% fall in profits to £6.8m and was achieved by cutting business costs by nearly 13%.

“Despite this we still continued our strategy of investment into business areas which enhance our capabilities,” said the directors.

MediaVest, founded and owned by David Lucas and Andy Jeal, saw clients respond to the downturn by reducing marketing expenditure and by switching to cheaper methods of promotion such as search engine optimisation.

“As a consequence we have seen our turnover reduce during the year,” said the directors. “Our ability to drive business growth in these higher margin channels has seen us maintain a strong gross profit performance however.”

The company’s management is optimistic for the coming year and expects clients to spend more on marketing, but the potential impact of Government spending cuts has left them cautious and keen to maintain a tight control on costs.

Dividends to Mr Lucas and Mr Jeal increased by 24% to £1.2m for the year. No one at the business could be reached for comment.