This is a contrast to 2010, when operating costs for the Top 30 soared by 85 per cent.
Kingston Smith says the 0.04 drop in operating profits shown in these most recent results are due to a combination of rising employment costs and general overheads.
While gross income across the board has risen by 13 per cent, employment costs have also risen – by 14 per cent.
Kingston Smith W1 says that 19 of the Top 30 groups reported an operating profit while three – Coutts Retail, The Team and Lambie-Nairn – reported operating losses.
Start, BrandOpus and Black Sun saw the biggest increases in gross income, while The Team, Sun Branding Solutions and Lambie-Nairn saw the biggest decreases.
It says a marked improvement in performance among independent groups has seen their gross income rise by 17 per cent, while that of group-owned consultancies has risen by just 6 per cent.
In its analysis of the results, Kingston Smith W1 says, ‘Overall, results have been mixed in the sector this year. Independent companies have shown tremendous growth in revenue, but are still some way behind the group-owned companies in terms of maintaining profit margins and overall productivity levels.
‘This gap is slowly eroding though, and it will be interesting to see whether this trend will continue in next year’s survey.’
It adds, ‘While there has been growth in this sector, it doesn’t appear to have filtered down to the operating profit figure, which suggests that agencies are working much harder to generate this extra revenue.
‘The current Top 30 is a long way off the heady margins seen at the beginning of this decade!’
|Gross income||2011 (£’000)||Year-on-year change(%)|
|Design Bridge||20 129||13.12|
|Radley Yeldar||14 281||10.67|
|Sun Branding Solutions||14 228||-10.09|
|Publicis Consultants UK||12 127||14.02|
|The Brand Union||11 763||12.76|
|DCA Design International||11 666||29.46|
|Jones Knowles Ritchie||10 524||10.53|
|Operating profit||2011 (£’000)||Year-on-year change (%)|
|DCA Design International||2 942||46.73|
|Publicis Consultants UK||2 514||-3.16|
|The Brand Union||2 119||8.61|
|Venture Three||1 910||21.19|
|Jones Knowles Ritchie||1 898||7.96|
|Radley Yeldar||1 878||30.96|
|The Partners||1 605||14.07|
|Wolff Olins||1 267||18.41|
|Operating profit per head||2011||Year-on-year change|
|Venture Three||46 585||6.41|
|The Partners||34 149||-0.49|
|DCA Design International||30 020||19.78|
|The Brand Union||29 027||8.61|
|Publicis Consultants UK||24 408||-13.50|
|Coley Porter Bell||18 410||-11.07|
|Jones Knowles Ritchie||17 255||-6.76|
|Wolff Olins||15 265||9.85|
|Black Sun||14 573||23.86|