LONDON — Lewis PR has reported organic growth of 13% for its 2015 fiscal year, taking revenues to $65m.
Reported growth, including acquisitions, was 23%, for the year ending 31 July. Lewis PR founder and CEO Chris Lewis told the Holmes Report that the agency remains focused on building its US presence, which currently accounts for around 54% of its revenues.
"You can’t be credible globally unless you’re big in America," said Lewis, noting that "at least 50% of global PR spend is in America and maybe another 25% is decided in America."
While Europe and Asia-Pacific both grew well, said Lewis, the US was slightly slower — thanks in part to increased spending on agency restructuring and a $1m investment in the firm's Rise training academy.
Lewis currently has four US offices — Boston, San Francisco, San Diego and Washington DC — but the firm hopes to add New York, Chicago and a Southern presence to its footprint. The agency has used acquisition to build its US presence in recent years, buying digital shop Piston earlier this year after previous deals saw the addition of PageOne PR and DMG.
Lewis noted that the firm will continue to use acquisition as a means of expanding its global footprint, either geographically or via specific service areas such as mobile. He said that the firm is also aiming to enter Latin America, and wants to boost its presence in India.
"There are two dangers for PR agencies working globally," he said. "Being marginalised by scale, or being marginalised by other functions taking your profession. Even if PR is dead, it will still be a conduit for selling in other services. That gives us situational fluency."
Lewis attributed the agency's growth to its improved digital capabilities, which he says has helped it win numerous assignments, including Huawei Honor, Turkish Airlines and SAS in Europe, along with Dyson, Airbnb and Qatar Airways in Asia. He added that the firm is also seeing more multi-market assignments, such as Infosys, Google, and Splunk. "People are looking for better value and consolidation."
Despite the growth, though, Lewis remains cautious about overall global PR growth. " I think people should be preparing for a tougher market in the future," he said. "Europe is still sluggish and China has slowed down. And there will be a new US president — inbound presidents frequently bring the bad news."
In response to these conditions, the firm is focusing on continued reinvestment, which Lewis believes is a competitive edge that independent firms have over their publicly-held rivals. "At some point somebody has to ask the question — which capital structure is the best for professional service firms?"
He noted the firm had allowed its profitability to dip, but margins are still "in the 10-15% range, even after reinvestment."
"Rapid change means rapid reinvestment," he said. "If employee-owned business have any success it’s choosing when to reinvest. Now is the time, because it can double up the level of return."
The Innovation SABRE Awards - North America 2017
Extended deadline November 7 - don't miss out!