Two leave as Aegis reduces French links: Media buying group reports pounds 18m losses and makes pounds 40m write-offs

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The Independent Online
TWO directors are to leave Aegis, the loss-making media buying and planning group which yesterday announced write-offs of pounds 40m and pre- tax losses of pounds 18m for last year.

Consultants have been brought in to review the central management structure and costs, and a further 100 redundancies across the board are likely from the 1,700 workforce. About 100 jobs have already gone.

The two directors leaving are Thierry Vial-Collet, whose job as chief operating officer is being abolished, and Michel Lefebvre, chief financial officer.

The departures mark a shift away from France, which once represented the bulk of the company's business and now accounts for about 25 per cent of turnover. The French shareholding has been halved to 15 per cent.

But although Aegis, the holding company of the Carat Group, has diversified and is now listed only in London, the management has remained largely French. Gross margins in France have been reduced to levels similar to those of its other European operations.

The write-offs were far higher than the pounds 14.1m anticipated at the time of the refinancing in October last year, when pounds 61m was raised to pay off debts, although analysts subsequently included them in their calculations.

The write-offs include pounds 4.2m to cover a fine imposed by the Conseil de la Concurrence - French equivalent of the Monopolies and Mergers Commission - for alleged anti- competitive activities in France. Aegis has appealed.

There is also a pounds 4.5m write-off associated with the company's move from its plush headquarters in the centre of Paris.

Losses of pounds 18m compared with a restated loss of pounds 11m in 1992. 'Aegis will be slow to turn around, and the job ahead is pretty daunting,' one analyst said. Shares were unchanged at 23.5p.

Frank Law, chairman, said: 'Aegis has been through some wrenching changes in the past two years. We have survived them and we are now stronger financially than for some years.' He said business prospects were improving.

Turnover slipped from pounds 2.8bn to pounds 2.7bn and gross income was down from pounds 190m to pounds 153m. Debts stood at pounds 5.8m against pounds 68.2m.

Carat received net new billings of about pounds 300m and now handles about 11 per cent of all European media purchasing.