Enero Group Lifts Profits 35% Despite 1% Revenue Decline
Australian agency holding company Enero Group lifted EBITDA 35% to US$7.4M despite 1% revenue decline. Cost discipline and AI experimentation replace growth strategy amid client headwinds.
Australian agency holding company Enero Group (ASX: EGG) reported higher profits on lower revenues for H1 FY26, with EBITDA rising US$1 million to US$7.4 million while total revenue dipped 1% to US$68 million.
Divergent Performance Across Enero's Three Agency Groups
The results revealed sharply different outcomes across Enero's portfolio.
BMF, the group's flagship creative agency, posted the strongest profit result, with EBITDA climbing from US$3.3 million to US$4.8 million. The agency secured the Westpac account in February 2025, described as its largest-ever client win, and was named Spikes Asia Strategy and Effectiveness Agency of the Year and Effies Effective Agency of the Year.
Orchard delivered the group's strongest efficiency story, growing EBITDA from US$1.6 million to US$2.8 million. The agency focused on two specialist areas: pharmaceutical product launches in healthcare and rising CGI production demand in consumer marketing. Hotwire Global moved in the opposite direction, with EBITDA falling from US$6.1 million to US$3.6 million.
Enero ended the period debt-free, with US$27.2 million cash in the bank. Shares closed up 3.64%, giving the company a market capitalization of US$51.7 million.
Cost Discipline Replaces Revenue Growth as the Core Strategy
Enero's H1 FY26 result follows a similar pattern from its full FY25 results. Continuing operations EBITDA rose 2% to US$14.1 million in FY25, even as net revenue fell 3% to US$138.7 million. The company reduced total expenses by 4% year-over-year through headcount reductions, AI experimentation, and the divestiture of OBMedia.
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Enero's strategic direction, as reflected in FY25 results communications, emphasizes "specialist, high-performing agencies" as the foundation for growth, with the company accelerating a leaner offering via cost savings and AI experimentation amid client headwinds.
The contrast with global peer Dentsu is notable. Dentsu recorded a record loss of ¥327.6 billion (US$2.18 billion) in 2025, driven by goodwill impairment charges of ¥230.8 billion in the Americas and ¥79.3 billion in EMEA. The write-downs followed years of acquisition-driven expansion that did not deliver projected organic returns.
Broader Asia-Pacific Market Conditions
Geographic performance divergence is a defining challenge across the region. Dentsu's Japan operations grew 6.2% organically in 2025, while APAC excluding Japan declined 6.8% for the full year. The first positive APAC quarterly growth since late 2022 emerged only in Q4 2025, at 0.3%.
Despite near-term pressure, the Asia-Pacific marketing agencies market is projected to grow at a 14.24% compound annual rate, compared to the global market rate of 4.55%. The global market is valued at US$473.57 billion in 2026 and projected to reach US$591.63 billion by 2031.
China's market adds structural complexity. Brands in China work with an average of 12.7 agencies to navigate fragmented platforms including Alibaba, Tencent, and Douyin. That environment rewards specialist agencies over large generalist groups.
Enero's next scheduled results update will provide further clarity on whether the BMF pipeline, including the recently secured HCF creative account, translates into measurable revenue recovery in H2 FY26.
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