STW has reported double-digit revenue and profit growth for the full year, although slightly short of earlier guidance of a 15% net profit lift. For the year to 31 December the company posted revenues of $402 million, up 12.4%, and underlying net profit of $49.5 million, up 12.5%.
Digital revenues were up by $43 million over the year to $185 million, a 30% year-on-year increase, while earnings before interest, tax, depreciation and amortisation were up 10.5% to $87.6 million.
CEO Mike Connaghan said in a statement the result was pleasing after a strong second half in the face of "continued challenging economic conditions". "We have delivered strong revenue and profit growth in the second half of the year, underpinned by organic market share gains," he said.
Connaghan highlighted STW's investments in research business Colmar Brunton, data consulting firm Beyond Analysis, digital agency Cru Digital and experiential agency Maverick as continuing to broaden the group's offering.
Speaking to investors, Connaghan said STW would continue to be "vigilant on costs" and protect margins in 2014, predicting "strong organic growth" both in Australia and in overseas markets, with "mid single-digit NPAT growth absolutely achievable".
He said while there was "more money being spent on [traditional] marketing than ever before", mainstream media continued to "depower ... with consumers taking more control of the messaging they take into their lives".
"That means the two Ps of place and product become more important. The traditional marketing mix has changed and will never be the same again – not only has it changed, but it's evolved to where we have to consider more than the four Ps.
"Those are platforms and predictability, which is where data comes in. We're growing our investment into these new areas. For many it's overwhelming but for STW it's a massive opportunity. We're having the right conversations with the best clients – we're on the front foot."
On his outlook for the broader market in 2014, Connaghan added: "It's very early in the year and January is a very quiet month traditionally, but it would appear on the surface that things are improving. It would appear that the government is starting to get into some sort of stride at the moment and maybe we'll see an improvement."
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