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Aegis profit growth makes life harder for Vincent Bollore and Havas

Aegis shareholder Vincent Bollore, whose Havas empire owns 29.9 per cent of the media buying and research firm, is no doubt pleased to see Aegis revenues (up 4.4 per cent in the half year to June) and post tax profits (up from £6.6m to £25.3m) bounce back but these numbers make his long-mooted takeover bid look that bit more difficult.

Not by the share price performance, which slipped slightly, but the increase in Aegis debt from £257m in 2009 to a chunky £398m following the £207m acquisition of Harold Mitchell’s Australian Mitchell Communication Group in July.

With Aegis capitalised at £1.3bn plus all that debt it now looks much too big a mouthful for Havas.

Aegis revenue grew most rapidly in the Far East and Latin America, as with all the marcoms groups these days, and CEO Jerry Buhlmann will be relieved to see its expensively-acquired (before his time) market research division Synovate move into the back, albeit only to the tune of £3.7m at the operating level.

So-called underlying profits at £48m seem to show the promise of better returns on £663m of revenue and Buhlmann says that recession-induced restructuring costs (which hit post tax profits by £15m in 2009) are now out of the way.

His challenge now is to show that he hasn’t overpaid for Mitchell and that Synovate is worth keeping.

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