AGENCY PERFORMANCE LEAGUE.

The industry has seen a remarkable 71 per cent increase in operating profits, according to this year's survey of agency profitability.

The bandwagon is rolling again for a healthy number of Britain's agencies -- but high staff costs continue to be the spanner in the spokes preventing the return to the heady days of 20 years ago.

Operating profit margins of the kind achieved during the industry's halcyon days remain elusive. However, some of the newer, fast-growing shops have proved that it's possible to absorb increases in business without significant increases in other overheads.

These are the main verdicts from this year's survey of agency profitability -- the tenth of its kind -- prepared by the specialist accountant Willott Kingston Smith & Associates using figures taken from accounts filed at Companies House and published exclusively in Campaign.

The survey has a number of general and specific purposes. In one respect, it provides a handy check on the industry's general health. In another, it takes the temperature of the major agencies with data showing whether they are in robust health or ambulance cases.

WKS's overall conclusion is that the industry's general fitness is good, with operating profits having grown by a staggering 71 per cent on the back of a 10.9 rise in gross income. That's to say revenue earned from clients and retained by the agency after deducting external costs such as media. However, staff costs grew by 11 per cent.

Interestingly, some of the year's best performances have been recorded by those with the least sexy reputations. Witness Interpublic's McCann-Erickson, where operating profits leapt from 2.8 million [pounds sterling] to 7.5 million [pounds sterling] through a combination of increased income and improved efficiency.