Aegis warns advertising will stay in doldrums

Aegis, the media buying company, yesterday described 2001 as the "deepest advertising recession in living memory" and warned that this year would not be much better.

Doug Flynn, its chief executive, said he expected difficult trading conditions to continue for much of the year with the market "flat to slightly down". Analysts said the comments were more cautious than expected following upbeat statements from advertising groups such as Publicis, Havas and Interpublic. However, they said Aegis was well placed to benefit from an upturn. Aegis cut 300 jobs last year and has not ruled out further redundancies.

Aegis pointed to $1.7bn of new business revenue from its Carat media buying division in the year to 31 March as a sign of its resilience. Revenues at its media research business rose 21 per cent to £185m. Group underlying pre-tax profits fell to £63m from £78m. This was before £18.6m of exceptionals which included a £10m charge for its operations in Argentina. After exceptionals and interest payments, profits were just £14m.

Mr Flynn said Aegis, which is Europe's largest independent media buying group after Tempus was snapped up by WPP, wanted to remain independent.

Aegis shares fell 4p to 110p.