Saatchi & Saatchi NZ's billings drop; Clemenger's commissions rise

Secondo Investments, the owner of Saatchi & Saatchi New Zealand, posted a 6.3% drop in billings last year, while rival advertising firm Clemenger Group reported higher commission and fee income, according to their 2014 accounts.

Saatchi & Saatchi's clients i include Toyota, Spark, ASB Bank and DB Breweries' Tui brand.. In the past calendar year, Secondo had gross billings of $117.7 million, down from $123.6 million a year earlier, its accounts show. Profit fell to about $1.4 million from $2.1 million, and partly reflected a 10% gain in wages and salaries to $18.6 million.

Saatchi & Saatchi NZ communications director Isobel Kerr-Newell declined to comment on the earnings, other than to note the consolidated results for Secondo combined various operating entities including the brand advisory firm Starcom. The policies of the ultimate owner, Paris-based Publicis Group SA, meant she couldn't provide a breakdown of earnings.

Secondo's accounts show the company took an impairment of $16.3 million against its SSW Holdings subsidiary, the immediate owner of Saatchi & Saatchi NZ. This reduced the net carrying value to $25.7 million from about $42 million. Parent company income included about $25 million in dividends.

Last week, Publicis Groupe, whose advertising agencies include Leo Burnett and Saatchi & Saatchi, reported a 39% gain in global sales for its second quarter. Asia Pacific sales rose 28%. Publicis last year abandoned a $US35 billion merger with Omnicom Group that would have created the world's largest advertising firm.

Clemenger, ultimately part of New York Stock Exchange-listed Omnicom Group, lifted revenue by 5.6% last year, on growth in fees and commissions. Net profit climbed to $13.1 million from $12.3 million the previous year and included a $1.1 million goodwill impairment.

Clemenger's local business units include Raydar, Clemenger BBDO, Colenso BBDO, 99 Enterprises, Proximity Wellington and public relations firm Porter Novelli New Zealand.

In answer to written questions, Clemenger NZ chief executive Jim Moser says sales growth last year was mainly driven by "new business wins" including Volkswagen, Michael Hill International, SkyCity Entertainment Group, Smiths City, Pumpkin Patch, Avis/Budget and Mondelez.

"Also contributing to our revenue growth was organic growth from Spark (Touchcast/.99), Mitsubishi (Clemenger) and New World (.99) and Pizza Hut (Raydar)," he says. Profit growth was "due to strong operating performances from Touchcast, Colenso and our media assets."

(BusinessDesk)