Core reports 11% earnings rise for 2019 despite ‘cloud of Brexit’

Marketing communications group Core saw its earnings rise almost 11 per cent last year, despite "the cloud of Brexit" leading to advertising growth of just 1 per cent across the market in the period.

Earnings before interest, tax and write-offs at the group, which plans and buys advertising on behalf of clients, arrived at €3.27 million in 2019. Client billings of €212.1 million were similar to the previous year, according to accounts just filed.

The Irish-owned group, which employs 322 people, said it had managed to grow its revenue by diversifying its business.

But 2020 has presented "a different picture" for the group and the sector as a whole, said Core chief executive Alan Cox.

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Ad spending at Core is likely to be down about 12 per cent this year after the Covid-19 crisis led to an abrupt slowdown in marketing activity in the spring, although the fourth quarter has seen a rebound.

Core’s billings rose 8 per cent in the first two months of 2020 compared to the same period in 2019. This “encouraging start” to the year was wiped out by the Covid-19 crisis, which saw many major marketers press pause on their advertising budgets.

Demand fell by 34 per cent in the second quarter and by 19 per cent in the third quarter compared to the same periods in 2019.

No repeat

However, despite the implementation of Level 5 restrictions across the State, there has been no repeat of the plummet in advertising spend this quarter.

As a result of a “substantial” and sooner-than-expected turnaround dating back to the start of October, Core is projecting 4 per cent growth in demand for advertising in the final three months of the year.

“Businesses are over the shock that resulted in the massive cancellations in the second quarter,” said Mr Cox.

“They are more clearheaded now and realise that advertising is crucial to building their businesses back to growth. They are also rightly concerned that if they pull back, they will give their competitors a free run during this crucial quarter.”

Mr Cox said he expected marketing investment to grow at a faster rate than the overall economy in 2021. But it will be 2022 before total investment matches the activity levels seen in 2019, when the market in the Republic was an estimated €1.044 billion.