M&C Saatchi says annual profit to beat forecasts

M&C Saatchi said annual profit would easily beat expectations after the advertising group won new business in a strong first half.

Headline pretax profit rose 420% to £10.5m in the six months to the end of June from a year earlier as revenue increased 14.7% to £171.2m. M&C Saatchi swung to a reported pretax profit of £4.8m from a loss of £5.6bn.

The company said its clients' belief in marketing to fuel growth had revived after a slump early in the Covid-19 crisis. Client retention was strong and existing clients such as Reckitt, GlaxoSmithKline and the UK government awarded the company new contracts. Uber, Google and other technology contracts joined the client list in the first half.

"Full-year profit before tax and earnings [are] expected to be substantially ahead of consensus," M&C Saatchi said. Shares of the company, formed by Maurice and Charles Saatchi in 1995, rose 5.7% to 154.27p at 10:55 BST. The shares have gained almost 80% in 2021.

The company was hit by an accounting scandal in 2019 that threatened its reputation with corporate clients. It then had to chart the Covid-19 crisis, which prompted companies to slash advertising spending to conserve cash.