One of Australia's largest advertising companies STW Group has painted a gloomy picture for the year ahead, but insists it can still lift its profit.
The boss of the firm behind the Kevin 07 and Share a Coke campaigns says the slide in consumer confidence and slump in ad spending by companies is making business "seriously tough".
Michael Connaghan says while STW is on track to lift its full year net profit this year, it won't be as strong as the 12.5 per cent increase in 2013.
STW Group expects mid-single digit growth for 2014 following its $49.4 million result last year.
"This is a year of hard grind," Mr Connaghan said.
"We are fighting harder than ever for gains in an environment of declining consumer confidence, and a slump in advertiser spending levels.
"We also quite simply need to win more business. It is tough going."
His comments came as the group unveiled a fairly flat first half result, with net profit up by just one per cent to $18.9 million.
STW Group managed to increase its revenue to $190.3 million, an increase of 9.3 per cent.
Shares in the company plunged by more than eight per cent, and by 1502 the stock was 11.5 cents weaker at $1.35.
Mr Connaghan said he believed the second half of the year would be better for STW Group, with the company focused on cost cuts and revenue growth.
He said the group was continuing to "future proof" its business by expanding into digital, data and shopper marketing areas.
TOUGH TIMES AHEAD IN THE AD WORLD FOR STW GROUP
* Total revenue of $190.3m, up 9.3 pct from $174.05m in 2012/13
* Net profit of $18.9m, up 1.2 pct from $18.7m
* Fully franked final dividend steady at 3.3 cents a share
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