Attack on costs gives Aegis pounds 13m at interim

AEGIS, the debt-laden media buyer, shrugged off a depressed advertising market to lift taxable profits from break-even to pounds 13.2m for the half-year to 30 June, writes Neil Thapar.

Earnings per share amounted to 2.16p against a 13.1p loss. But the interim dividend has been passed for the second year running and there will be no final payout because of the uncertain trading outlook.

Frank Law, the chairman, warned that a weak advertising market in Europe and new legislation affecting the French advertising industry were likely to put pressure on margins.

The profits improvement, which came on a 5 per cent underlying fall in turnover to pounds 1.5bn, reflected the benefits of a drastic reorganisation that cost pounds 27.5m in restructuring charges in the first half of 1992.

Interest charges more than doubled to pounds 8.1m despite a fall in net debts from about pounds 80m to pounds 42m, on negative shareholder funds of pounds 157m. Last October, Aegis was forced to raise pounds 20m in a convertible rights issue to save it from collapse.

Roger Parry, a company spokesman, said yesterday: 'We have sorted out the operating structure of the group and cut the cost base, but the group still carries a heavy debt burden which will take time to resolve.'

Analysts are looking for taxable profits of about pounds 21m for the full year.

Aegis shares rose 4p to 39p.