Creative agency BMF is performing for ASX-listed Enero as the marketing, technology and communications group shaves costs in “challenging times”.
Enero lifted net revenue almost 25% to $241.6 million for the year to June. But the owner of BMF, Hotwire Group, digital and experiential agency Orchard and adtech platform OBMedia posted a 10% drop to $24.4 million in net profit after tax.
BMF, the AdNews Agency of the Year, reported 4% revenue growth for the year, excluding once-off federal government work.
And in July, the first month of a new financial year, BMF and Enero’s health agency Orchard grew 4% combined.
“BMF continued to perform strongly … as it further diversified, invested and grew its customer experience and its innovation capabilities,” CEO Brent Scrimshaw said when briefing market analysts on full year results.
“BMF continues to be lauded for its creative leadership and effectiveness as the home of ideas in the Australian creative landscape.”
BMF also further extended its long running and award winning partnership with supermarket chain ALDI in Australia.
“I'm also pleased to announce this morning, a new multi-year partnership between ... BMF and Alinta Energy in Australia, which represents a significant win for the agency,” says Scrimshaw.
Enero has also been cutting costs as the advertising market softened.
And this, the company says, will improve margins.
“Full year benefit of cost initiatives taken in FY 23 and an ongoing focus on profitability underpin an expected increased margins in agencies over the first half compared with the last year.”
The company has also started a strategic review of its 51% investment in OB media to ensure “shareholder value” is maximised.
A slide from the presentation to analysts:
The company is also disappointed with a fall in its share price in the second half of the financial year to June.
The shares closed Friday at $1.65, a long way from the 52 week high of $3.48.
However, Scrimshaw says the company’s strategic framework and portfolio approach is delivering diversified revenue and earnings growth while building differentiated capabilities.
“We now derive 31% of revenue from clients working in multiple scenarios. businesses across geographies,” he says.
“Enero group now has a truly global offering working with blue chip clients of significant scale, with 37% of the group's revenue originating from clients in more than one geography.
“We've transformed the growth over the past three years growing net revenue at 21% CAGR between FY 20 And FY 23, While growing EBITDA even faster at 39% CAGR.
“We'll also continue to drive efficiency and profitability through our ongoing cost management initiatives.”
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