Management cuts pay for MediaVest profit rise
MEDIA planning and buying agency MediaVest has increased pre-tax profits by 15.8% after slashing management jobs.
Pre-tax profit for the Manchester-based company increased to £7.75m from £6.69m for its financial year to the end of February 2008. Turnover increased by 4% to £229m.8
The profit rise was largely a result of the £2.1m the company saved in directors’ remuneration over the year.
Management staffing levels were cut from 47 to 21, although the company did increase staff numbers in media and administration.
The directors’ wage bill was most dramatically reduced – from £3.66m in 2007 to £1.54m in 2008. This is despite the highest paid director’s salary being increased by £31,000 to just over £649,000.
The total number of employees increased by 21 to 194, yet the management cull meant overall staff costs were reduced by around £400,000.
In its annual report the company said that its strong headline figures have to be weighed against the impact that broader macro-economic factors will have on future trading. It added that growth will be difficult in the short to mid-term.
It said: “Market conditions have impacted heavily on the media expenditure patterns of both the financial and retail advertising sectors, both of which have been strong sectors for our business in recent years.”
The company’s survival strategy for the future is to increase investment in digital services, an area it sees as having strong growth opportunities.
It added that as clients’ budgets reduce, it will devote increased resources to generating new business – already demonstrated by the increase in media staff.
The company also had to write down the value of its investments to the tune of £221,000.
Money owed from debtors on February 29 had increased by £7.1m to £33.4m on last year and cash available at the bank and in hand had fallen by the same amount (£7.1m) to £17.7m as a result of being owed that money.
Edinburgh-based Media Vision, in which MediaVest has a 50% interest, took a £2m loan from the company, and counts as one of its debtors.
