M&C Saatchi lifts expectations, shares rally

Advertising firm M&C Saatchi reported a narrowing of its pre-tax losses on Wednesday as it said full-year results were set to be ahead of consensus expectations thanks to a strong new business performance and client retention.

For the year to 31 December 2021, the company posted a pre-tax loss of £8.5m compared to a £8.6m loss the year before, with revenues down 12.1% to £225.4m as many clients reduced or cancelled their marketing spend due to the pandemic.

Still, M&C struck an upbeat note on current trading, which it said was ahead of expectations for the first five months of 2021, with half-year headline pre-tax profit set to be in excess of £10m. Full-year results are expected to be ahead of consensus.

Chief executive officer Moray MacLennan said: "The resilience of the company and our people was reflected in the outstanding client retention across 2020. Our agility allowed us to quickly adapt to the new market conditions (including an even greater focus on digital) and enabled the swift implementation of our new strategy.

"This is delivering a positive performance in the first five months of 2021, so we anticipate being ahead of consensus for the full year. Profit in all five of the new divisions has grown in 2021 through meeting new client demands in the new digital landscape.

"This initial success and our continued focus on innovation, technology and data, combined with creativity, which is at our core, gives us confidence for the remainder of the year and beyond."