Creston sells ad agency for £28m

Delaney Lund Knox Warren, the Covent Garden-based advertising agency behind campaigns such as Vauxhall's Corsa and Morrisons fresh food, was today sold for £28 million in cash.

Creston, the marketing group behind pollsters ICM, is selling DLKW to advertising giant Interpublic Group, owner of agencies such as Lowe and McCann Erickson.

Creston chief executive Don Elgie said he was selling DLKW because the marketing industry has undergone dramatic change since he bought the ad agency in 2005.

Elgie wants to rely more on growth areas such as digital, consumer insight and health. But he said Creston is still committed to some "above-the-line" advertising.

The sale will mean Creston will generate 38% of revenues from digital, up from 31%, and allows it pay down debt. Creston will also take a £3.2 million "non-cash" loss on the DLKW disposal.

Headline pre-tax profits dropped 3% to
£13.8 million before exceptionals in the year to March. Revenues fell 3.9% to £80.5 million, which Elgie said compared favourably with rivals, "the majority of whom reported revenue declines ranging between 7% and 12%".

The general election boosted ICM but it still only generated 3% of revenues at the polling division, which has mostly corporate clients.

Creston is paying a dividend of 1p, up from 0.73p last year.