As a result, Aegis achieved organic revenue growth of 9.8%: the highest rate of any global marketing communications group, and an 11th consecutive year of industry out-performance. Organic growth was ahead of the total regional market in every one of our reported business segments.
Largely as a result of this organic growth, the Group delivered double-digit growth at constant currency in turnover (+16.2%), revenue (+14.2%), underlying profit before interest and tax (+13.7%) and underlying profit before tax (+16.0%).
Underlying earnings per share on a fully diluted basis increased by 18.8% at constant currency. Our reported results reflect the weakness of the US dollar, which accounted for some 31.2% of Group revenue in 2007 (2006: 33.6%), with average exchange rates down 8.6% against sterling year-on-year.
Reflecting this strong 2007 performance and our continued prospects for good growth and industry out-performance, the Board has proposed an increase of 24.3% in the final dividend, representing a 21.1% increase in the total dividend for the year.
We also made good progress on our primary strategic goals in both Aegis Media and Synovate: increasing revenue from global clients, putting in place foundations for future years’ organic growth through global account management resource, new products and services and our programme of business transformation.
We strengthened the Group through a total of 17 acquisitions, bringing in new services with the potential to be scaled throughout our networks. Their integration has gone well. Our acquisition investment was particularly focused on further geographic expansion, particularly in emerging markets, digital and new technologies at Aegis Media and on new intellectual property at Synovate.
Although the market for both media communications services and market research remains highly competitive, trading conditions were generally favourable throughout the year, with good demand for our services from existing and new clients. Our markets remained dynamic, with major shifts taking place in the allocation of marketing resources both geographically and by activity.
In anticipation of these market developments, we continued to move the Aegis Media offering from regional to global, reflected in successful international pitches, the creation of new global client resources and specialist practices and the roll-out of key brands and services to new markets. In 2007, more than one quarter of Aegis Media’s revenue came from digital marketing services, the fastest growing part of our industry. We expect that percentage to increase further in 2008.
At Synovate, we saw further excellent results from the second full year of our Global Client Relationship initiative. Product innovation also continued to help drive performance and we made a number of significant steps in delivering the operational transformation of Synovate through the SmartWork programme designed to reduce cost through offshoring, outsourcing and deployment of technology across all areas of the business.
Outlook
After a strong finish to 2007, trading since the start of 2008 has been healthy across the Group. However, in light of greater uncertainty about global economic prospects, we remain alert to any signs of softening and are taking external factors into account in respect of our business planning and investments in the course of 2008. We remain cautiously optimistic about the prospects for Aegis in 2008. We expect to deliver further good underlying performance at constant currency this year, based on a number of Aegis-specific factors:
- we expect our own organic revenue growth to exceed market growth in both Aegis Media and Synovate once again;
- at Aegis Media, we will benefit from US$1.668 billion of net new business won in 2007, our leadership in digital services, new technologies and services, and our investment in global client resource;
- at Synovate, we expect to continue to deliver superior growth rates from our global client relationship programme and development of new products and services;
- we will benefit from a full year contribution of the 17 acquisitions made in 2007, and the four made so far in 2008;
- we expect to broadly maintain Aegis Media’s margin at its industry-leading level;
- we will also target further operating efficiencies at Synovate; and
- we expect our net interest charge to reflect a higher level of average net debt and our underlying effective tax rate to remain broadly in line with our 2007 underlying effective tax rate.