A UK-wide collective of creative agencies has reported a drop in profit despite “strong” revenue growth, as bosses cited “considerable industry-wide headwinds”.
Aim-listed The MISSION Group, which has its registered office near Barnstaple in Devon, is made up of around 20 marketing and advertising businesses with sites around the world. The group counts search engine giant Google, swimwear brand Speedo and carmaker Porsche among its clients.
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During the first half of its current financial year, the company recorded revenue of £41.8m - up 11% on the same period a year earlier.
During the period it won new business with the UK Space Agency, Goldman Sachs, and drinks brand Jägermeister, while two of its brands Krow and Bristol-based PR agency Speed Communications recently secured the Post Office as a client.
Reported profit before tax plummeted by 95% to £0.1m from £1.5m a year earlier. The board said the group had “not been immune” from challenges in the US tech sector, adding that a reduced level of activity in this market had impacted margins.
Bosses said that, “as in previous years”, they expected the majority of profit to be generated in the second half of the year.
Julian Hanson-Smith, chair of The MISSION Group, said: “We continue to be mindful of wider macro-economic uncertainty impacting client spend, but still anticipate full year revenue growth across all the Group’s primary business sectors. Encouragingly, run rates from the US technology sector are starting to return to 2022 levels.
“We remain confident that the group’s strategy of deliberate investment in our people and capabilities will underpin a good full year performance. The effects of higher operating and interest costs are likely to have an impact on profit growth for the current year which, as previously reported, we expect to be at the lower end of the Board’s original expectations but still ahead of last year’s level.”
The group said its net bank debt had risen to £14.9m from £11.4m at the end of December, adding that this was driven by changes in client prepayment behaviour linked to the “tightening” within the US tech sector.
