Frank PR and Hotwire 'trading well' as Australian owner goes increasingly global

Tech shop Hotwire and consumer specialist Frank PR showed "above average margin achievement" in the past year, according to their owner, the Australian holding company Enero Group.

The group, which also owns research firm The Leading Edge and creative agency Naked, recorded net revenue of AUD$113.5m (£67.1m) in the year to 30 June 2016, up 2.9 per cent on the year before.

With Australasia net revenue at AUD$46m (£35.5m), down from $53.4m (£41.2m) the year before, the group is increasingly earning its revenue globally, with UK and Europe revenue of AUD$51.2m (£39.5m) (up 6.7 per cent in constant currency) and US revenue of AUD$16.3m (£12.6m) – a 12.3 per cent rise in constant currency.

Key highlights listed for the UK and Europe included the following:

  • "Hotwire and Frank PR continue to trade well with above average margin achievement showing consistency of PR businesses."
  • Second-half results were lower than the first half, with the company noting an "uncertain economic outlook following Brexit".
  • "Hotwire Labs offering opening up new revenue streams in digital builds, SEO and analytics."

"While the businesses lack scale in the market, they continue to open up bigger revenue opportunities," the business said of the US operations.

The firm achieved net profit after tax of AUD$6.6m (£5.1m), reversing a loss of $2.8m (£2.2m) in the year before. Operating EBITDA margin improved significantly from 8.3 per cent last year to 11.6 per cent this year. This is just below the 13 per cent recorded for the top UK PR firms in a recent study by Kingston Smith - although Enero's margin would have been slightly lower had a depreciation charge not been included, Kingston Smith noted. PR firms were the marcoms segment with the highest margins, the accountancy firm's survey found.

Enero has 550 staff – nearly half of those working with Frank PR or Hotwire – across its 10 businesses in eight countries, with most staff in Sydney, London and New York.

Both Frank and Hotwire are London-headquartered with New York and other offices. The former recently had its deputy MD depart to head his own agency, while the latter has made two senior hires in London.

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