STW moves on new mobile, search and social acquisitions

By Duncan Craig | 9 August 2012

Australia's largest marketing and communications holding company STW Group is close to making new acquisitions in the mobile, search, and social sectors as it accelerates its strategy of 'digital dominance'.

The company said it would spend between $20 million and $30 million on new investments before Christmas.

The company revealed its intention to buy more businesses in its presentation to investors today. STW Group Chief Executive Mike Connnaghan said they would soon be purchasing companies with “top flight social and search capabilities”.

Connaghan also said that 30% of the company's overall revenues were now coming from digital, buoyed by strong performances from Ogilvy, JWT and The Brand Agency. He said the company's strategy was to remain “big at home”, expand in Asia, and increase its digital presence.

“We are convinced a strategic yet cautious expansion into Southeast Asia is a sensible and exciting prospect,” said STW Group Chief Executive Mike Connnaghan at its half-year profits presentation. “Very soon we will be announcing some more deals in Southeast Asia which will strengthen our presence in key service lines, particularly in digital.”

STW said in the half-year to June that both its revenue and profit rose 4.7%. Its profit was $18 million, right in line with expectations. Media and digital was strong, while its PR and branding divisions delivered weaker performances. Connaghan said the Ogilvy business was back on track and it is expected to return to growth in the 2013 financial year.

In the past year STW has either acquired outright or made investments in a variety of companies, including e-commerce player Amblique, Sweet Digital, and Edge Marketing, which is based in Thailand and Vietnam.

STW, which already has 50 staff in Indonesia, said it aimed to stay ahead of the digital sector via more investments.

“We know the world of marketing brand communications is coming under more pressure via the massive structural shift going on through the digital revolution,” Connaghan said. The company has plenty of funding to scoop up more businesses, increasing its debt facility by $50 million to around $220 million.

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