Although overall revenue was down, the firm increased its operating profit and EBITDA, and went from a reported loss of £25.6m last year to £747,000 this year.

Media Square’s research business Illuminas also had a good year, according to director Mike Roderick. He told <I>Research</I>: “We're well aware of the economic situation and I'd say we're cautiously optimistic. One or two clients have had budget cutbacks but we've made that up with new clients.”

Asked by the BBC’s Adam Shaw on this morning’s Today programme how the group had achieved the turnaround amid such tough economic conditions, Media Square chairman Roger Parry said: “Unfortunately, in a sense, it’s success for the wrong reason – we had to cut a lot of staff and cut a lot of costs. Our staff head count is 9% down and actually we've had very little help from the marketplace at all.”

Parry added that business is likely to get worse before it gets better, as the banking crisis in the final months of 2008 caused budgets for this year to be set significantly lower.

Illuminas was not affected by the Media Square job cuts earlier this year, and is intending to take on new graduate staff in the autumn.