Print Published 19th Nov 2017, 16:33

Designer, media buyer and ad agency win top award for financial credentials

Three privately-owned UK marketing agencies won the full complement of eight “plums” for their financial credentials in this year’s Private Plums awards, but there was a slight decline in the average number of plums awarded to each company.Juciest plums 2017

The top performers were design consultancy Jones Knowles Ritchie, media buyer John Ayling Holdings and advertising agency St Lukes Holdings.  It is the second occasion on which Jones Knowles Ritchie and John Ayling have achieved the top score.   Only 11 companies have won the maximum number of plums more than once over the 16 years since the awards were founded.

The Private Plums award scheme was launched by the marketing industry’s financial research company Fintellect in 2002 to recognise good financial management among privately owned UK marketing agencies irrespective of size. The results are published in Marketing Services Financial Intelligence (www.fintellect.com).

To win a full crop of plums in more than one successive year, companies not only have to be consistently profitable but they also have to manage their finances efficiently.  None of this year’s top scoring companies had achieved the maximum score in the previous year.

The full analysis and report is available free to subscribers – see below.

For this year’s survey seventy-eight privately owned marketing businesses were identified with annual gross income in excess of £2.5 million.

There are eight criteria that have to be achieved to get top marks and agencies are awarded a “plum” for each of the criteria they satisfy.   Thus the maximum crop of plums that can be earned is eight.

This year’s survey revealed:

  • Signs of a slowdown in revenue growth during the period, putting pressure on operating profit margins.  In response companies seem to have pruned their staff costs sufficiently to maintain or even improve output per head.
  • Fewer companies achieved Fintellect’s benchmark for annual growth in gross income.
  • More companies achieved an operating profit per employee of £12,750, as more companies kept staff costs at or below 55% of gross income.
  • The tougher economic climate had put pressure on working capital, with slightly fewer companies conserving enough working capital to cover three months’ operating costs in the hypothetical absence of any revenue.
  • Borrowings increased, with more companies having net debt equivalent to one-third or more of shareholders’ funds.

Winners of a high number of plums are likely to become some of the juiciest targets for potential acquirers (assuming the owners want to sell).  However, neither of the top two companies in last year’s survey – The7Stars Holdings and TRBR (parent of The Red Brick Road) – have been sold yet and both have scored relatively well again this year.

Of the 32 companies that have won a full crop of plums at least once during the 16 year life of the survey, 13 have been sold since.   However, relatively few companies have been able to maintain a high scoring performance over a long period. Only Ptarmigan Media has won a full crop of plums on three occasions during the 16 years and that agency could only justify seven plums this year.

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“That does not mean that standards have declined”, observed editor Bob Willott, “but it does reflect the trend for the best performers to be snapped up by larger
corporations and thereby disqualify themselves from inclusion in subsequent surveys.”

The full findings from this year’s Private Plums survey are available free to subscribers by following the instructions below.