STW laments its ‘hangover’ as shareholders prepare to vote on WPP takeover

STW suffered a hangover in 2015

STW: reported a loss of $52.6m in 2015

In its final annual report before being taken over by WPP, STW group has lamented 2015 as the year it awoke with a hangover from its poor performance in 2014, reporting a loss of $52.6m.

Chairman Robert Mactier admitted that “the only positive to take away from 2014 was that in 2015 we undertook a strategic review that challenged the way we operate”.

On Monday, STW will hold an extraordinary general meeting where shareholders will vote on the merger with WPP as the global giant takes a 61.5% stake in the business.

As part of the process, WPP’s presence on the board will be expanded with former Group M executive John Steadman and WPP global planning executive Jon Steel both joining the board.

The marketing and communications holding company saw underlying earnings fall by 7.8% to $76.8m and net profit after tax drop by 13.1% to $39.6m.

“The impact of one-off cash write-downs and the costs associated with the strategic review combined to deliver a very poor reported statutory loss of $52.6m,” Mactier said.

“While our first-half results in 2015 continued the poor trajectory that we had seen in late 2014, the 2015 second-half result demonstrated that the turnaround was under way with margins beginning to stabilise, underlying organic revenue growth being delivered and very strong cash flow being achieved.”

CEO Mike Connaghan admitted in the annual report the challenges faced last year.

“Our 2014 performance pointed to the fact bolder moves needed to be made. Hence our strategic review,” Connaghan said.

“2015 was not an easy year for anyone in the Australasian marketing industry. This was particularly true for STW as we implemented our strategic review.”

While the business continued its rebuilding process ahead of the takeover by WPP, revealed by Mumbrella in December, Connaghan highlighted a number of companies within the group which had strong years, including JWT which had its strongest year in a decade.

STW paid tribute to Neil Lawrence

STW paid tribute to Neil Lawrence

Both Mactier and Connaghan paid tribute to Neil Lawrence, founder of Lawrence Creative, who died in an accident while on holiday.

“His untimely passing was a shock and incredibly sad,” Connaghan said.

“Neil was a legend in our world. Talent like his is irreplaceable. The legacy of his work we will ensure lives on.”

In a move rare for a major company, STW devoted two pages of the report to a tribute to Lawrence, including memories from those who had worked with him, including former Prime Minister Kevin Rudd and Qantas CEO Alan Joyce.

Simon Canning


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