Irish PR company Drury Porter Novelli paid owner Omnicom a handsome dividend of €1.5m last year, even though umbrella company Drury Communications posted a €1.1m loss – due to €1.5m in ‘exceptional items’ – according to a report in the Irish Times.
Which casts an interesting light on the financial to-ing and fro-ing among the marcoms giants and their many subsidiaries. Drury Communications operating profit fell ten per cent to €423,711. Turnover was €2.5m.
Drury’s clients include building materials company CRH, Paddy Power, McDonald’s, HP, energy firm Eirgrid and financial giant Blackstone. Last year it also advised on the receivership of Thomas Crosbie Holdings, the examinership of DIY retailer Homebase (different from the UK version presumably) and the receivership and subsequent examinership of fashion retailer A-Wear.
Which gives an interesting insight in the nature of the Irish economy, still recovering from a disastrous burst property bubble.
Omnicom is quite entitled to extract a dividend of course, so long as the loss this induces doesn’t jeopardise the company in question. Its behaviour is remarkably similar to that of private equity operators although, in their case, they extract their money and leave the company to get on with it.
A better analogy might be old-style investment trusts. The likes of Omnicom and WPP control thousands of companies; in effect a diversified bet on the future of the global ad business. Which may be why they, and their rivals, are struggling to achieve decent decent revenue growth in an increasingly competitive market. By definition they’re bound to have nearly as many losers as winners.