For evidence, look no further than Taylor Nelson Sofres. The company yesterday reported its first set of interim results since it was created by an Anglo-French merger in December. Although the headline figures mean little, like-for-like revenues increased by 13 per cent and operating profits were up by 17 per cent.
The chairman, Tony Cowling, points out that multinational companies are increasingly awarding all their business to a single supplier. The merger gave Taylor Nelson a wider reach. Now it is abandoning its loose network of national offices in favour of international units specialising in fields such as healthcare, automotive and telecoms.
This clearly makes sense in these industries. But a large chunk of Taylor Nelson's business remains essentially local - for example, there are few multinational retailers.
What's more, the company remains vulnerable to a downturn. Despite attempts to make the business recession-proof by winning long-term contracts, 70 per cent of revenues still come from one-off projects. And Mr Cowling thinks that annual market growth, traditionally about 10 per cent a year, will slow to 6 per cent.
True, the increasing use of sophisticated technology and the advent of the Internet as an advertising medium mean that demand for Taylor Nelson's services will continue to grow. And there is always the chance it will be snapped up by a large advertising group. But on a forward multiple of 24 times forecast full-year earnings the shares - down 6p to 102p yesterday - are high enough.Reuse content