The PR industry has bounced back from the recession, returning to an average growth rate of nearly ten per cent in 2010, PRWeek's Top 150 PR Consultancies 2011 report reveals.
The league tables, which rank the UK's top PR agencies according to fee income, showed the average growth for a PR agency in 2010 was 9.24 per cent. This was calculated by accountants Kingston Smith W1 using financial data provided by PR agencies.
This puts the market back in line with 2008's growth figures - positive news for an industry that saw its growth shrink to less than one per cent in 2009.
Bell Pottinger retained its position as the UK's largest PR agency by fee income, with £68m, up £7.9m on the previous year. The Big Partnership remained comfortably in the lead in the table outside London, notching up £6m in fees, despite this marking a nine per cent decrease on the previous year. Edelman remained the UK's largest independent agency, with a fee income of £29m, a 12 per cent rise. The total fee income netted by the Top 150 agencies in 2010 was £839m, compared with £814m in 2009.
Esther Carder, partner at Kingston Smith W1, which helped compile the table, said it was encouraging that growth was evenly spread across the sample, with half the Top 150 consultancies growing by ten per cent or more.
PRCA director-general Francis Ingham said the figures gave good reason to anticipate strong future growth.
Both Carder and Ingham predicted an upturn in M&A activity in 2011. There has been a surge in M&A deals in 2011's Q1, according to the latest analysis by accountants Grant Thornton UK.
The firm's M&A tracker shows the number of deals announced across the media sector in this period doubled compared with the same period the previous year (35 in 2010, 67 in 2011). Most recently, as reported on prweek.com/uk, tech agencies EML and Wildfire have merged, and in January this year Four Communications Group acquired travel agency BGB. Lansons Communications also acquired a stake in social media agency Cubaka in March 2011.
Grant Thornton UK's media corporate finance partner Dominic Bolton said the activity could partly be explained 'by the fact that we have seen a desire by some groups to expand their social media and digital skillset, and others their geographic footprint'.
9.24%: Average growth rate of Top 150 agencies
£839m: Total fee income of Top 150 agencies in 2010
£7.9m: Bell Pottinger's additional fee income in 2010
14.2%: Average profit margin for Top 150 agencies outside marcoms groups
Source: PRWeek Top 150 Consultancies 2011 report
HOW I SEE IT
Esther Carder, Partner, Kingston Smith W1
The healthy growth was evenly spread across the sample, with about half the consultancies growing by ten per cent or more. The general mood in marketing services and PR has begun to improve with a marked upturn in M&A activity.
Francis Ingham, Director general, PRCA
Last year was the year PR consultancies shrugged off the recession and got into their stride again. For every one that contracted, roughly four grew. Rather than the prolonged period of gloom and retrenchment that some predicted, there is now good reason to anticipate strong future growth.