Synovate Returns to Full Year Revenue Growth

Aegis has reported a return to full year growth in its research arm Synovate, where takings rose 9.8% to £572.6m and operating profit (at constant currencies) increased 19.4% to £45.6m.

Net revenue (gross revenue minus direct costs) increased 9% to £350.7m, while on a constant currency basis, operating margin increased 90 basis points to 8.0%. The improvement in operating margin was achieved despite an increase in staff costs during the second half of the year. At the end of 2010, headcount had increased 3.9%, year-on-year, with underlying staff costs for the year up 4.0% in constant currency from 2009.

Synovate reported 'good performances' from most of its business units, and says it started 2011 with an 8.8% increase in orders on hand.

In 2010, sales in the Americas were up 12.7% at constant currency, while gross revenue rose 13.1% on 2009 to £175.4m, and net revenue increased 4.7% to £109.9m. In Latin America, Synovate says it entered the year with a strong order book, which supported a 'healthy increase' in sales and gross revenue during the year.

Market conditions throughout Europe were less buoyant than other regions, and consequently EMEA sales were down 0.9%, while gross revenue increased just 0.6% to £239.2m. Net revenue rose 2.8% to £143.7m. The firm says performance in Germany, Italy, the Netherlands, Russia and Turkey were diluted by the ongoing economic challenges being experienced by the Greek and Spanish markets. The UK market remained 'challenging', as a result in the decline in public sector activity in the second half of the year, and growth was also slow in France.

The Middle Eastern region experienced a 'progressive economic recovery' during 2010, and during the year, Africa also produced 'solid sales' and gross revenue growth.

Sales in Asia-Pacific were up 10.2% at constant currency, with gross revenue of £158.0m, up 6.1%. Net revenue increased 9.8% to £97.1m.

Synovate's strongest performing market was the consumer sector, while the automotive sector showed signs of recovery. However, sales in the healthcare business were slightly down on the prior year.

'In 2010, Synovate management maintained its focus on driving profitable sales and improving efficiencies, supported by a broad geographic network and an extensive product portfolio,' says Aegis CEO Jerry Buhlmann. 'Given the re-focused strategic approach being implemented by management in 2011 and our healthy orders on hand position at the start of this year, we are increasingly optimistic about the outlook for Synovate, with the market research industry expected to grow by around 4% in 2011, in line with industry growth in 2010.'

Web site: www.synovate.com .