MDC revenues down 7% in '09, remains bullish on PR

TORONTO: MDC revenue declined about 7% for the year to $545.9 million, from 584.6 million in 2008.

TORONTO: MDC revenue declined about 7% for the year to $545.9 million, from $584.6 million in 2008. The company saw a 5.5% decline in organic revenue for the year, with a 1.4% increase in Q4 organic revenue. Net loss for the year was $13 million, compared to net income of $8.3 million in 2008.

“We refinanced our balance sheet,” said Miles Nadal, CEO and chairman at MDC, of the loss. “We had non-cash items that affected that income.”

However, he's optimistic about the company's performance, citing the 3% year-over-year revenue increase for Q4, to $149.7 million, compared to $144.7 million in Q4 2008. This follows a trend of other PR and ad firm holding companies reporting quarterly gains this past quarter in comparison to the rest of 2009.

Annual revenue from strategic marketing services, which includes PR, integrated, marketing consulting, and advertising firms, increased from $363.6 million in 2008, to $371.4 million in 2009. The division's Q4 revenues were also up year-over-year to $106 milllion.

He said that PR currently makes up about 10% of the company's revenue, and he expects that percentage to grow.

“Over the course of the year, we plan to increase our presence in the PR space,” he said. “We expect it to be double digit growth in 2010 for PR.”

Companywide, the company expects 5 to 7% revenue growth in 2010 and 7 to 10% net income growth.

In September, following the announcement of a partnership interest in social media agency Attention, Nadal told PRWeek that the company's goal is to add 500 social media experts to the portfolio in the next three to six months.

Of the current status, he said, “We added about 50 people in the space across the whole network.”

In a recent conference call about the earnings, he referred to the investment of Attention, and a 70% acquisition of marketing agency Communifix, as an example of its strategic direction in 2010 and 2011.

“We have a unique window of opportunity on the M&A front as strategic buyers, and investors are still largely on the sidelines in our industry,” he said in the call. “We're entrenched in leveraging digital and social media and analytics as our key focus for our activities.”

MDC partners includes Lime PR and Promotion, Crispin Porter & Bogusky, Veritas, and HL Group, among other marketing firms.

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