Enero predicts 5-7% revenue decline, but Australian agencies grow in tough market

Enero Group is reporting double-digit revenue growth for BMF and Orchard for the second half of the financial year, but expects net revenue and EBITDA to drop for the full year, amid challenging market conditions in the global technology sector.

The Australian agencies, including BMF and Orchard - Hotwire is global - are performing well in FY24 H2, according to its latest ASX announcement, growing by double-digits compared to the previous half.

For the 12 months ending 30 June 2024 (FY24), though, the group expects to report net revenue of between $189 million and $192 million, which represents a 5% to 7% decline on a like-for-like (LFL) basis and 20% to 22% decline on an underlying basis year on year.

Enero Group also forecasts EBITDA (earnings before interest, taxes, depreciation, and amortisation) of between $36 million and $39 million or a 6% to 14% decline on a LFL basis and a 50% to 55% decline on an underlying basis year on year.

The group noted that business continues to be affected by "a global downturn in the technology industry and ongoing macroeconomic headwinds".

The ASX announcement continued: "Enero is pleased by the performance of the Australian-based agencies, which continue to thrive in the competitive healthcare and consumer practices space."

Enero is also managing its cost base tightly, it told investors, and is undertaking additional cost initiatives in FY24 H2 as top-line challenges face the business.

This comes as a competitive sale process continues with OBMedia, Enero Group's performance advertising platform.

Last month, Mediaweek revealed that BMF's chief creative officer Alex Derwin would be leaving the business to set up his own agency. Derwin has since started the venture, but hasn't confirmed details to the market. BMF is yet to announce his replacement.

Earlier this month, BMF launched its first work for The a2 Milk Company since winning the account.

The new brand platform, Only a2 Will Do, accompanied by the hero film, Tough Tummies, celebrates the everyday of heroism our stomachs while recognising the natural absence in a2 milk of the the A1 protein found in most conventional milks.

The work from the creative agency closely followed a series of promotions within the agency’s creative and innovation departments, including Dave Roberts and Tom Hoskins to the shared role of group creative directors.

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Top image: Brent Scrimshaw, Enero Group chief executive officer