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By Ruth Bender
Of DOW JONES NEWSWIRES
Aegis Group PLC (AGS.LN), the U.K.-based advertising and marketing firm, Thursday said organic revenue remained static in the third quarter, compared with the first half and reiterated that it expects full-year underlying profit to be in line with market expectations.
In a trading update, Aegis said organic revenue, a closely watched metric in the advertising industry that strips out currency effects, acquisitions and disposals, fell 10.8% in the first nine months of the year. The group usually doesn't provide full revenue figures for the first nine months or the third quarter.
At the half-way stage organic revenue fell 10.8% compared with a fall of 11.6% at the end of the first quarter.
The advertising industry has been hit hard by the global recession that saw companies cut ad spending and forced advertising agencies to cut jobs as revenue dwindled but most companies started to see a sequential improvement in the third quarter.
WPP PLC (WPP.LN), the world's largest marketing company by revenue, last month posted a 8.7% drop in third-quarter organic revenue. French Publicis Groupe SA's (PUB.FR) organic revenue fell 7.4% and Havas SA's (HAV.FR) dropped 9.3% in the quarter.
Aegis, which owns Europe's biggest media buying agency Carat and digital planning group Isobar, in August said it expects full-year profit to be in line with market expectations, even though it cautioned that it doesn't expect any upturn in the advertising market in the second half.
Opinions among advertising executives vary as to whether the ad market will return to growth next year. WPP's Martin Sorrell has said he expects flat organic revenue next year while Publicis' CEO Maurice Levy expects a return to organic revenue growth by the middle of 2010.
Carat in October said it expects global advertising expenditure to drop 9.8% this year, with a return to 1% growth in 2010.
In the statement Thursday, Aegis said organic revenue was down 10.4% at Aegis Media and 11.5% at market research unit Synovate.
"In Aegis Media, new business momentum remains strong going into the fourth quarter and 2010, with year-to-date net new business wins of $2.4 billion," the group said.
In Synovate, the trend in revenue and sales improved with a continuing strong sales order book at the end of the third quarter, Aegis added.
At 0837 GMT, Aegis shares were trading down 3 pence, or 2.4%, at 113p. The FTSE 250 mid-cap index was down 0.7%.
The stock has gained about 36% since the start of the year as analysts say the group may be the first European agency to profit from a recovery after organic revenue started to improve in the second quarter.
Aegis is nearly 30% owned by Vincent Bollore, the French industrialist who is also a controlling stockholder and Chairman of Havas SA, a French advertising group which owns the Euro RSCG advertising agency.
-By Ruth Bender, Dow Jones Newswires; +33 1 40 17 17 54; ruth.bender@dowjones.com