Enero Australian earnings increase but revenue slides amid spate of senior executive departures

Matthew Melhuish EneroMarketing group Enero remains in the red after posting a net loss of $2.8m in the 2015 financial year – a marginal improvement on last year – on the back of an eight per cent decline in revenue.

The loss for the holding company which owns agencies including BMF and Naked, is down from $2.9m in 2014 and comes despite a two per cent rise in operating earnings to $9.2m.

Enero chief executive Matthew Melhuish admitted the group faced “challenges relating to specific businesses” during the year but insisted the foundation of the company was now “stronger”.

The 12 months to June 30 were punctuated with regular top level departures from many of its Australian businesses which include ad agency BMF, PR agencies Frank PR, Hotwire and CPR, and strategy shops Naked, Jigsaw and The Leading Edge.

Enero admitted that Naked Communications in particular, whose CEO Carl Ratcliff and global chief operations officer Paul Ward left in April, needed “rebooting in second half financial year” in both Australia and the USA “given leadership changes”.

Ratcliff left to take the CEO role at One Green Bean.

BMF, The Leading Edge and Jigsaw also saw senior staff leave.

But while Australian revenue fell 11.4 per cent to $53.5m. operating EBITDA in the local market climbed just over 16 per cent to $6.5m, a performance Enero put down to “more settled business teams and better new business conversion”.

Australia contributed 40 per cent of operating EBITDA, up from 34 per cent last year, and 49 per cent of overall revenue, down from 51 per cent.

Melhuish, whose contract at Enero was extended by another four years in June, said: “We are pleased to deliver growth in earnings this year.

“While there have been some challenges over the course of the year relating to specific business units, our foundation as a group is much stronger and our international exposure to the UK and USA markets gives us the benefit of seeking out larger revenue opportunities.”

He added: “We will focus on two key areas in the upcoming financial year – new business conversions and building our profile in the USA.”

The company singled out Frank PR and Hotwire for “continuing to perform well with consistent new business and strong margins” while BMF – of which Melhuish is the M – “continues to lead in creative reputation but requires more new business wins”.

Enero revealed that of its total revenues of $120m, down from $110m in 2014, one client represents 11 per cent, with its top 10 clients generating 38 per cent of revenue.

Steve Jones


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