Investors were not convinced. Aegis shares, which have fallen from a peak of 112p last month, only edged up 0.5p to 83.5p yesterday despite the company reporting a 13 per cent increase in first-half operating profits to pounds 24.1m.
Although Aegis clearly depends on overall advertising spending, it is also benefiting from the increasing trend towards using media planning agencies. The proliferation of television channels and magazines, not to mention the Internet, means that companies have to spend increasing amounts of time thinking about where to place their ads.
What's more, as an independent agency Aegis is able to move faster than its rivals, most of which are part of larger advertising groups. Stripping out acquisitions, organic sales growth was almost 9 per cent in the first half.
At the moment, Aegis is sticking to strategic bolt-on acquisitions, including spending pounds 15m on building up a network in the Far East. Longer term, however, Mr Davis still sees scope for consolidation in the media buying industry. Full-year profit forecasts of pounds 79.9m place the shares on a forward earnings multiple 23. Despite immediate worries, the shares offer good long-term value.