Advertising was hit harder than usual this time around because many companies thought they could struggle through by paring promotional budgets. The benefits are notoriously difficult to measure, but Peter Mead, chief executive, thinks the realisation is sinking in that the long-term damage to brands is not worth the savings in the short term.
If that is true then projections from the advertising industry that real growth (excluding inflation) in revenues will be between 6 and 8 per cent this year and next could be realised. In a fixed-cost business that sort of underlying improvement in sales might feed through to impressive profits growth.
It was certainly the case at AMV last year where a 21 per cent rise in turnover to £243m fed through to a 73 per cent increase in pre-tax profits, which jumped from £4.75m to £8.22m.
Earnings per share were 68 per cent higher at 15.7p and shareholders were rewarded with a 41 per cent rise in dividend to 7.4p.
As the chart shows, spending on advertising in the UK has shown a strong sensitivity and gearing to the economic cycle. When the economy slows, advertising plummets. The good news is that advertising grows when the economy booms.
Much of AMV's success is down to self-help and its wise decision not to cut staff levels as billings started to fall five years ago. Banking on making up the difference with new accounts was a gamble but it appears to have paid off. When Saatchi started to fray at the edges, for example, AMV was able to step in and pick up its Mars account.
Consensus earnings forecasts of just under 20p a share this year put the shares on a prospective price/earnings rating of 17. Compared with the forecast growth rate of almost 25 per cent that is undemanding, but the ease with which agency assets can walk out the front door suggests caution is needed.
The shares have risen fourfold over the past four years. They may pause for breath now, but given the promise of above-average growth for the rest of the decade, they are not expensive.