MDC Strategic Marketing unit reports 10.4% revenue jump in Q2

The unit, which contains the holding company's PR firms, achieved 11.5% organic growth on revenue of $427 million during the first six months of the year.

MDC Partners chairman and CEO Miles Nadal
MDC Partners chairman and CEO Miles Nadal

NEW YORK: MDC Partners' Strategic Marketing Services unit, which contains its PR agencies, reported revenue of $221 million in the second quarter of 2014, representing 10.4% organic growth over Q2 2013.

For the first six months of the year, the group achieved 11.5% organic growth on revenue of $427 million.

The holding company has majority stakes in HL Group, Allison+Partners, and Kwittken, among others. It reported overall organic revenue growth of 7% to $317.7 million in the second quarter. For the first six months of the year, revenue was up 7.3% organically to $610.3 million.

The company’s net income climbed almost 68% to $16.5 million in Q2 2014. Net new business wins totaled $53.7 million in the quarter. It also saw an operating profit of $28.2 million, compared with $27.5 million in the same period of last year.

The holding company’s net income was $7.6 million and net new business wins totaled $78.3 million for the first six months of the year. Operating profit for the first half of the year was $39.7 million compared with $38.4 million last year.  

Miles Nadal, chairman and CEO of MDC Partners, said on an earnings call on Thursday that the holding company "delivered very strong results in the second quarter."

"It’s clear that our business model is unique and increasing the return on marketing investment for clients, and increasing the sustainable profitable growth rate of our business," he said.

Nadal added that PR agency Allison+Partners is continuing its "aggressive and profitable" expansion with the opening of two offices in France.

"This is enabling us to service our important clients that are Fortune 100 brands on a broader geographic basis," Nadal said on the call.

Allison+Partners' US revenue increased 21.8% year-over-year in 2013. Approximately 25% of the growth was organic, with 75% derived from new business wins.

He also noted that, in terms of the company’s M&A activity, it is seeing a "better pipeline" than it has in the last five years.

MDC is hoping to close on a "number of promising [M&A] opportunities" within the next few "weeks and months," said CFO David Doft on the earnings call.

The company has also benefitted from the failed merger of Publicis Groupe and Omnicom Group.  After the two holding companies called off the combination in May, Nadal said in a statement that MDC Partners has been "picking up talent at an accelerated rate from both of those organizations, probably more from Publicis than Omnicom, but still a lot from both."

Last month, MDC Partners appointed former Burson-Marsteller executive Michael Bassik as MD of the strategic communications group and president of digital operations.

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