Matthew Freud’s earnings rise 30% to £8.4m

Pre-tax profits at PR and marketing agency group increase to £8.5m as it wins new business including Comparethemarket

Matthew Freud made more than £8m last year from his PR and marketing agency group, Freud Communications, 30% more than he earned in 2012.

Freud Communications, which has clients including Pepsi and US studios Universal, Warner Bros and Fox, slightly increased its pre-tax profits to £8.5m last year.

As the sole shareholder, Freud effectively earns what the company makes in post-tax profits, £6.7m, as well as a dividend payout of £1.7m.

His total payout of £8.4m is well above the £6.45m he made in 2012 because the company did not make a dividend payment that year. In 2011 Freud made £5.7m.

The unnamed highest-paid director, believed to be chief executive Nicola Howson, took home £301,000.

The company paid £1.86m in UK corporation tax, less than the £1.96m in 2012 due to a drop in the rate to 23.25%.

Revenues at Freud Communications rose by just under 3% year on year to £39m, with wins including price comparison site Comparethemarket.

The company remains heavily reliant on its UK operation, which produced £23m in revenues, 59% of the total.

The best performing regions were “rest of Europe”, which grew revenue from £5.9m to £6.2m. The “rest of the world” rose from £2.3m to £2.75m.

Freud Communications maintained a very healthy operating margin of 30.3%.

Staff costs, including salaries and pensions, grew slightly from £14m to £14.4m. Total staff numbers remained almost flat at 241.

In July, Freud bought a £4m personal stake in Huntsworth, the company that owns a string of PR firms including Citigate, Grayling and Red.

Freud, who is married to Rupert Murdoch’s daughter Elisabeth, has developed something of a habit of buying personal stakes in companies he feels are undervalued.

In 2009 he bought a similar-sized stake in M&C Saatchi, the ad agency founded by brothers Charles and Maurice Saatchi.

He bought the shares at close to 20p and sold them at more than 200p several years later, making a multimillion-pound profit.

In 2012, he acquired a 3% stake in polling company YouGov. He also took a stake in Engine group, which owns assets including ad agency WCRS, which was recently sold to private equity firm Lake Capital.

Earlier this week Freud Communications took a significant minority stake in Seven Dials, the agency co-founded by former Independent editor Simon Kelner.

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Mark Sweney

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