Orchard will become Enero’s digital pillar for the entire network, the holding company has said in its half year results.
Orchard was acquired in February this year for $5 million in cash and subject to the achievement of EBIT targets up until 30 June 2021, the total purchase price cap is $27m. The Australian-founded shop posted FY17 revenue of $12 million and boasts 70 staff in its Surry Hill's office.
Enero says Orchard strengthens the group’s digital offering in both Australia and the USA markets as the health and wellness agency is expanding into Enero's New York offices.
Enero Australia, which includes BMF, Naked Communications, HotWire and The Leading Edge as well as other smaller agencies, posted a 5% drop in revenue in the six months ending 31 December.
It hit revenue of $20.9m in 2017 compared to $22m in 2016. It also posted a 6.6% drop in operating EBITDA to $3.7m.
The financial report credits BMF for “performing well”, following client wins from both Federal Government and NSW Government. The network attributed the drop across the network to “difficult trading conditions” for The Leading Edge and Naked Communications in the first half.
Enero said the co-location of all Sydney agencies to Pyrmont created efficiencies and greater collaboration saved $1m on the prior year's cost.
Globally, the group posted a 6.6% decline in revenue to $47.8m during the six month period compared to $51.2m in the year before. Operating EBITDA increased 16% on the same period.
These results excluded the prior reporting period contributions of Naked Communications UK and USA offices, which were closed last year.
Enero saved $3.2m in staff costs in-line with revenue decline predominately relating to the closure of Naked's overseas offices.
“We have had a strong start to this financial year improving the margin, and achieving increases in EBITDA and Net Profit,” Enero Group CEO Matthew Melhuish said.
“The acquisition of Orchard Marketing significantly strengthens our digital capabilities in Australia and the USA with Orchard not only operating as the Enero digital pillar brand but also enhancing the digital capabilities across our other sectors – research and strategy, creative agencies and PR/communications.”
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