Most privately owned marketing agencies making a profit despite tough trading conditions

Nov. 17, 2011 - PRLog -- Revenue growth evaporated, profit margins and productivity remained under pressure, and working capital came under increased strain, but most privately owned companies in the marketing sector still managed to earn a healthy profit in 2010, according to the latest annual review of financial performance by "Marketing Services Financial Intelligence".

The report shows that two-thirds of the 73 private companies examined earned a profit of £500,000 or more.  But none of them were able to satisfy all of the eight key financial credentials necessary to qualify for a full crop of “Private Plums” awarded by the publication.  

Some 77% of agencies failed to meet the revenue growth rate requirement of 15% per annum in the two most recent years.   A similar number failed to contain staff costs within 55% of revenues.

The best performers this year were BBH Holdings, Blue Rubicon PR, The Big Partnership Group, Response One Holdings, TBG Digital and Simpson Mahoney Parrock.    

At the bottom of the rankings were Loewy Group, Work Club, WAA, Hallco 990 (Barrington Johnson Lorains), Reading Room, The Lawton Communications Group, Direct Marketing Group (now Involve Marketing Partnership), Profero, Iris Nation Worldwide and The Engine Group.  Loewy Group has since been bought by Writtle Holdings.

Over two-thirds of the companies fell short of the working capital criterion for a plum, emphasising the vulnerability of the sector to any severe extension of, or deterioration in, the current recession.

The Private Plums scheme was launched by "Marketing Services Financial Intelligence" in 2002 to draw attention to good financial management among privately owned UK marketing agencies with gross income (revenue) of £2.5 million or more. Companies are awarded up to eight plums for meeting various financial criteria that include revenue growth, profitability and balance sheet strength. Winners of the maximum number of plums are likely to become some of the juiciest targets for potential acquirers – assuming they want to sell.

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Dedicated 24/7 online publication providing financial news, analysis and commentary on the marketing communications industry, edited by industry expert Bob Willott, an accountant and former special professor at the Nottingham University Business School