SYDNEY — Enero will focus on North American expansion after returning to growth over the past couple of years, the Australian marcomms group's CEO Matthew Melhuish has told the Holmes Report.

The holding group, which counts PR firms Hotwire and Frank as two of its key brands, recently reported a revenue increase of 33% for the last six months of 2018, after growing 3.5% for its 2018 fiscal year. Those results capped Enero's turnaround since 2012, when it changed its name from Photon after almost being sunk by debt.

Around half of Enero's A$103.7m in revenue comes from outside Australia, and Melhuish admitted that the company is "not as big as we'd like to be" in North America, which accounts for less than a quarter of its earnings.

"In Australia we are a substantial player, but it’s a small market," said Melhuish. "It’s a very nice place to live but most of the bigger action takes place, obviously, in North America, the UK and Europe."

"North America would be somewhere we’re not big enough, we’re sub-scale there and we definitely can see huge upside by adding weight there and connecting up more of these capabilities in new and exciting ways."

Accordingly, Melhuish said that the company, which named former Edelman veteran David Brain as non-executive director last year, is actively seeking acquisitions in the US. However, any dealmaking will not necessarily focus on the PR industry, even if that is now Enero's largest sector.

"I don’t know that we need more brands [in PR], we certainly want more capabilities and we want more teams so we would probably look to expand the brands that we’ve got," said Melhuish. "But, if through an acquisition process we acquired another brand then we’d figure that out as we went along."

Regardless, Melhuish noted that PR is a key growth driver for the group. "Hotwire and Frank are two extremely important brands in our business," he said. "Hotwire’s scaled out and is growing extremely well. Frank has got a sort of a reinvigoration going on — it’s great to see it with the energy and passion back to full force."

And Melhuish also rejected the notion that agency consolidation — a trend that is sweeping across bigger holding groups — would affect Enero, given it's relatively small size.
"On the one hand you’ve got someone like WPP with 400 brands — their challenges are widely known and, I guess, they’re going to be going through a reductive process," he said. "We’re probably at the other end of that park. We have a number of fantastic brands but they aren’t represented in all the markets that we’d like them to be in. So what we’d like to do is really make sure we have the right representation of our brands and capabilities at a better level of strength across our geographies and that’s what you’ll see us doing over the next couple of years — building out that network. I think our particular challenge is to put in place a stronger network in key areas."