MDC boasts bigger revenues, but is shy about mentioning a bigger loss
The Canadian listed marketing group MDC Partners boasted a 3.4% growth in revenue in the fourth quarter of last year, but buried in the small print was the news that it incurred a loss for the period of US$18.5 million.
The loss was influenced by an enormous jump in finance costs that was predicted here last October – up from $3.8 million in the corresponding quarter of 2008 to $10.8 million in the latest period (see MDC Partners to pay high price for increased debt after refinancing).
Even without finance costs the group incurred an operating loss of $0.9 million in the quarter compared with an operating profit of $1.4 million in the corresponding period in 2008. Earnings per share fell into negative territory too at $0.67 per share.
The group’s results for the whole of 2009 were no better, with a post-tax loss attributable to shareholders of $18.3 million. Its operating margin for the year was a meagre 3.7% and net borrowings of $166 million exceeded shareholders’ funds by 78%.
All of this prompted chairman Miles Nadal to declare that “2009 was an extraordinary year…where we exceeded all of our key financial projections.” Goodness knows how excited he would have got if the group had actually made a profit.
MDC’s star agency is Crispin Porter & Bogusky.
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