Broker Tips: Aegis to make acquisitions

"Aegis now has the firepower to proceed with accretive bolt on acquisitions which should help to unwind this [convertible bond issue causing dilution] over the next 18 months" said Colin Tennant.

The Nomura analyst thinks that the stock may be more attractive after the results:

"The stock specific reasons for avoiding Aegis in favour of the agency peer group appear to be falling away." he said.

"Synovate [the market research arm], which reported loss in H!, has swung back to profit following cost reductions, and with 2009 margins of 7 pct, we still see room for further gains."

"Aegis Media has returned to growth, boosted in part by a series of major account wins, and momentum is now positive"

"The management succession issue has been resolved in a way which suggests stability" he concluded.

The company's pre-tax profits announced yesterday were down 10.5 pct on 2008, at £149.3m.

Nomura puts the media buying group on 'Neutral' with a target price of 127.6p. Panmure Gordon expects adjusted EPS of 9.09p for 2010 (8.58p in 2009).