Peter Scott’s Engine Group, whose companies include WCRS, Partners Andrews Aldridge and sports marketing business Synergy, made a small post-tax profit £422,000 in 2012 compared with a loss of £5.2 million in the previous year.
The results were affected by so-called ‘abnormal (hopefully one-off) charges of £2.1m and also a deferred payment of £3m to investor HIG Capital.
Revenue-wise sales increased ten per cent to £91m in 2012 and Engine says the first half of 2013 has seen a modest increase although it claims operating profit is up by 46 per cent in this period.
Engine CEO Peter Scott, one of the founders of Wight Collins Rutherford Scott, is keen to remind the world that Engine believes in investing ‘ahead’ of revenue, at the moment by investing in start-ups rather than acquisitions, although at some point the revenue will presumably need to catch up. But rather bigger rival, Canadian-based MDC Partners, has been doing this for about a decade and, so far, investors have stayed with it.
As for the future, Engine wants to get bigger in the US and China. At the moment it’s confined to two digital cum social media businesses in the US and a digital outpost and PR business in China although it claims these are doing well with some impressive blue chip clients like Nestle and Rolls Royce cars.
For now Engine is a sizeable UK business – about the same size in the UK as M&C Saatchi and VCCP owner Chime. It seems to have ridden out the recession in reasonable shape (confounding some of its critics) and new finance director Ashley Martin promises that those uncomfortably expensive one-offs are a thing of the past.
Its challenge now is to generate the funds to acquire the scale it needs in the US and China and the most likely route, as financial markets recover from the credit crunch, remains a public flotation (IPO) once some of those operating profits find their way to the post-tax bottom line.