MDC Q4 revenue up 12%; company sees $23m net loss

NEW YORK: MDC Partners reported revenue of $294.6 million in the fourth quarter of 2012, representing 11.9% organic growth compared with the same period of the prior year.

NEW YORK: MDC Partners reported revenue of $294.6 million in the fourth quarter of 2012, representing 11.9% organic growth compared with the same period of the prior year. 

The holding company, which owns majority stakes in Allison+Partners, HL Group, Attention, and Kwittken & Co, among others, saw a quarterly net loss of nearly $23 million and an operating loss of $7.1 million in Q4.

For the full year, organic revenue growth was 8.4%, reaching $1.1 billion. Its net loss for 2012 was $79.4 million and it saw an operating loss of $17.9 million.

Organic revenue represents change in constant currency without measuring the impact of acquisitions or disposals.

MDC's Strategic Marketing Services unit, which contains the group's PR firms, saw organic revenue growth of 17.6% in Q4, reaching $200.7 million. Full-year revenue for the unit was $721.2 million.

The group reported net new business wins of $33.7 million in Q4. A notable PR win in the quarter was Allison+Partners winning Toyota for a six-state region that includes Northern California and the Pacific Northwest in October.

Meanwhile, net new business reached an all-time high of $136.9 million for the full year, up 31.5% year-on-year.

David Doft, CFO of MDC Partners, attributed the company's performance to its new business growth.

“We are winning a lot of new business, and the reality is our firms across integrated and PR are delivering great results for clients,” he said. “In PR, we have seen double-digit growth for two years, and we think we are exceedingly well positioned and leading in new business.”

He attributed the net loss and loss in operating income to the group's acquisition strategy.

MDC did not acquire any PR agencies in 2012. However, Doft said it will look to add more PR firms to its portfolio in coming years.

“We continue to be very enthusiastic about future of PR and fundamentally believe it is one of social media's biggest beneficiaries,” he said. “More progressive PR firms are at forefront of leveraging social media as key driver for success, and we are on lookout for new firms on that front.”

This story was updated on February 26 to correct Doft's quote on MDC planning to acquire other agencies. The holding company is planning to acquire additional firms in coming years.

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