Profits grow at STW
STW Group has delivered a solid result with a slight rise in profits for 2011.
The company’s agencies include Ogilvy, Bohemia, DT Digital, Howorth, JWT, Junior, Moon, Shift, The Brand Agency, The White Agency, TCO and Tongue.
STW’s net profit after tax from its advertising, media and production interests rose from $31.7m in 2010 to $32.1m in 2011. And its diversified marketing and comunications profits rose from $23.9m to $24.6m. Total operating profits were up from $55.6m to $56.7m.
STW is partly owned by WPP.
STW’s CEO Mike Connaghan said: “This is a solid result. Our business model has once again prevailed in challenging market conditions, and we have continued on our growth trajectory in 2011.”
Connaghan signalled that the company’s recent strategy has been based on growing existing companies and launching from within, rather than acquisitions.
He said: “Earnings growth in 2011 has been largely organic, and we remain focused on extracting maximum value from our existing portfolio of companies. We have continued to grow revenues and gain market share and our new business pipeline remains strong.”
The company declared an underlying net profit after tax for 2011 of $41.3m, up 6.8% on the previous year NPAT of $38.7 m.
Connaghan added: “We have also maintained a high level of investment in training, and continue to invest in new revenue streams through new business start-ups leveraging proven talent in the business. These start-ups while adding revenue to the Group in the short term, are poised to start delivering solid profits in 2012. It is vital we continue to invest in incubating great talent with new ideas if we are to continue to shape and lead our industry.”
However, the company has increased its debt position – from $33.5m to $84.8m, which it said was due to earnouts to owners of companies it bought previously and to acquisitions.
Connaghan was also reasonably optimistic about the comapny’s growth prospects for this year. He said: “Despite the state of the macro economy, we are trading strongly and our revenues are growing.”
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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Does anyone think STW could get to finishing Junior’s website. It has been undergoing a ‘bit of a nip and tuck’ for 9 months. Goodbye Steve and Matt. Hello big agency cog that never gets anything done.
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CORRECTION
In the interests of accuracy… Our underlying Net Profit After Tax rose 6.8%, from $38.7 million in 2010 to $41.3 million for 2011. The numbers you have reported are just for our Advertising, Media and Production division. This $41.3 million profit figure represents OUR SHARE of profits, after tax and after all holding company expenses and interest, in the businesses we have investments in. Thanks.
Chris Savage
Chief Operating Officer
STW Group
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Thanks for flagging that up, Chris. Now duly corrected.
Cheers,
Tim – Mumbrella