NEWS19 November 2009

Synovate sees positive signs amid Q3 revenue decline

Financials UK

UK— Synovate’s organic revenue fell 11.5% during the first nine months of the year, its parent company Aegis said in an interim management statement today.

But despite the decline Aegis said there were positive signs for the company which had “a continuing strong sales order book at the end of the third quarter”.

Analysts at Citi noted things had actually improved at Synovate in Q3. While organic revenue was down 12.3% for the first half of the year, the year-on-year decline for the three months ended 30 September eased slightly to 9.9%.

Meanwhile, Aegis chairman and interim CEO John Napier (pictured) told an investor’s conference in Barcelona yesterday that “Synovate will return to profitability and is returning to profitability as we speak”.

Accoring to a Reuters report, Napier said Synovate’s recent problems have been due to clients deferring orders rather than cancelling them, adding that there has not been a “fundamental shift” in buying patterns or attitudes to market research.

Group-wide, Aegis saw a 1% rise in revenue on a reported bases, but an organic decline of 10.8%. In August the group reported a £3.2m operating loss at Synovate for the first half of the year, triggering a new wave of cost-cutting activites. Aegis axed 780 jobs earlier in the year to reduce group overheads.