No payout as Aegis slides into the red

SHAREHOLDERS in Aegis were denied a final dividend and warned not to expect any payouts in 1993 after the international media-buying company swung into the red last year after making pounds 54.4m in pre-tax profits in 1991.

Operating profits were down by only 12 per cent, at pounds 51.3m. But Aegis showed a pre-tax loss of pounds 1.9m after it took pounds 22m worth of reorganisation costs, and a further pounds 22m for losses on terminated activities, above the line.

It ended the year with borrowings of pounds 68.3m, against pounds 35.5m in 1991. The interest cover was nearly halved at 3.6 times.

Losses per share were 19.9p, against earnings of 20.4p in 1991.

Shares in Aegis, which were riding high at 118p last June, closed down 2p at 18p.

The pounds 22m reorganisation costs will cover redundancy payments, closures and asset sales. Aegis is losing 190 of its 1,850 employees, and cutting its offices from 59 to 46.

Gross margin as a percentage of the pounds 2.8bn turnover fell to 6.7 per cent, down from 8.5 per cent and 9.2 per cent in 1991 and 1990 respectively.

Aegis said gross margins would fall further in 1993 because of a new French law stating that companies such as Aegis, which used to receive cash discounts from the media industry for buying up unused space, can now receive income only from their clients.