STW reports increased revenues and profits despite ‘new normal’ of sluggish economy
STW Group – Australia’s largest marketing holding group – has delivered increased revenues and profits, numbers released to the ASX today indicate.
The part WPP-owned company – whose dozens of agencies include Ikon Communications, Ogilvy, Howorth, TCO, Tongue and JWT – reported revenues up by 7.9 per cent to $176m in the financial year just ended. EBITDA profits rose by 6.9 per cent tom $35.7m.
STW’s CEO Mike Connaghan said: “This is a credible, hard fought result achieved in the ‘new normal’ of an extremely sluggish economy, and with a backdrop of political uncertainty and accelerating structural change in our industry.”
He said growth had come via new business, better specialist services and new revenue streams such as merchandising and shopper marketing.
The company has also begun some expansion into Asia. He said: “We continue to approach this offshore expansion with measured caution. Our goal is to see our offshore business contribute around 10% of our total revenues and profits by 2016, and we are certainly on track to achieving that.”
The results also revealed that earnouts paid to former owners of acquired businesses contributed to the company’s debt increasing to $163m, with a further $31.7m earnout liabilities on the balance sheet.
The company is valued on the ASX at more than $0.6bn, with its shares trading close to their highest point in the last five year.
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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STW’s strategy to expand into Asia might be right, but their execution of that strategy is flawed unfortunately.
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“Just sayin…” – explain….
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I’m no financial wizard by any means, but if your revenues are up by $176 m and you have increasing debts of the same or even more ($194m,) then that’s not so good?
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