UK media buying group Aegis has reported a strong underlying pre-tax profit boost of 15.4% to £56.2m in the first six months of 2008, and expects full-year results at the "upper end" of market expectations despite the slowing market.

Aegis, which owns subsidiaries including media buying agency Carat, digital network Isobar and research firm Synovate, posted a 13.7% increase in revenue compared with the equivalent period last year to £607.6m on a constant currency basis.

The group easily exceeded analysts' forecasts, which had estimated revenue at the £580m mark.

Organic revenue growth for the group was 8.2% for the period to June 30, ahead of the market.

Underlying operating profit rose 16.7% on a constant currency basis to £65m, while the profit margin for the group rose from 9.7% to 10.7% year on year.

Aegis said that strong growth had been driven by solid organic growth, the rise of emerging markets, strategic acquisitions and a 13% strengthening of the euro against the pound, which benefited its European operation.

Exchange rate effects contributed £35.5m to the company's £607.6m revenue.

Aegis's share price was down 4p, or 3.46%, on last night's close to 111.5p at 10.53am today.

Despite the solid results, Aegis aired a note of caution looking forward.

"We achieved these results despite a trading environment that is becoming tougher - with signs of slowing demand, particularly in Spain, the US and the UK," said the Aegis chief executive, Robert Lerwill. "Consequently our revenue outlook for the second half of 2008 is less certain."

He said Aegis anticipated a lower rate of market growth in the second half of the year and was 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," he said.

The company said 29% of revenue from Aegis Media came from digital operations, up from 26% in 2007.

Aegis said that a restructure and job losses at its underperforming Carat US media buying business would lead to an overall charge of £8m for this year.

The company added that its second-half organic revenue growth rate would be affected by the problems at Carat US, which included the loss of major clients Hyundai and New Line Cinema.

In a conference call with journalists, Lerwill said that 200 jobs would go in the Carat US operation, as part of a restructure of the business.

Carat US accounts for 40% of Aegis Media's overall revenue in the north American market but just 6% to 7% of global group revenue

"We are accelerating our reorganisation of Carat in the US, through headcount reduction, a relocation of our New York office and investment in new talent," the company said.
Lerwill added that regarding the tightening of Aegis's cost base in other markets, the company was looking at containing, not cutting, costs.

He said that is some markets, depending ad revenue bookings, Aegis would not look to fill posts as staff left the company.

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