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STW sees profits rise despite ‘challenging’ market

Connaghan

Connaghan

The STW Communications Group has posted improved earnings and profits for the last financial year despite what CEO Mike Connaghan described as “challenging economic conditions”, driven by a $185m boost in digital revenues for the marketing services group.

Company revenues grew 12.4 per cent to $402.1m for the year ended December 31, with a profit of $87.6m up from $79.3m the previous year. The group’s companies include Ogilvy, DT, Ikon Communications, Spinach, Houston and an interest in the JWT Group.

Connaghan said in a statement to the ASX this morning: “Our full year trading results are pleasing in the face of continued challenging economic conditions. We have delivered strong revenue and profit growth in the second half of the year, underpinned by organic market share gains. We have also made significant progress in accelerating our growth strategy for the future. 
“Importantly, STW’s resilient and consistent growth performance highlights the benefits of the diversification and scale that underpins our business model. We have largely held margins while being able to invest significant funds into training, incubating new businesses and developing intellectual property.

“STW’s three pillared strategic growth focus remains firmly on track; we continue to drive growth out of our leadership positions in Australia and New Zealand; continue to ‘future proof’ our business by growing and leading in the evolving areas of our services, including digital and data; and are making very pleasing progress with the selective and careful export of our business into new markets in Asia and beyond.”

However, he stressed the need for the company to “diversify” its revenue streams away from traditional marketing disciplines,  signalling a greater push into data analysis and research after the acquisitions of Colmar Brunton and Beyond Analysis last year.

“We will continue on this path to ensure STW Group remains relevant and leading edge, irrespective of how quickly client marketing support needs change,” Connaghan said.

He said expansion into Asia was a key pillar for growth next year, and signalled “mid-ingle digit growth” for 2014.

Alex Hayes

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