Interim profits spark at M&C Saatchi

The AIM-listed advertising and media firm said like-for-like revenues in the six months to 30 June rose 4% to £211.5m, while net revenues increased 6% to £120.1m.

Pre-tax profits jumped 26% on the same basis to £14.2m.

M&C Saatchi said net revenues had been driven by 7% growth in non-advertising specialisms such as issues and media as well as advertising, which was up 6%.

Around 75% of 2023 clients spent in the first half, while new wins included McDonalds, Ford and Ikea.

Profits were further supported by cost cutting and divestments. Faced with a slowdown in marketing spend across the tech sector, M&C Saatchi introduced a global cost efficiency programme and exited a number of non-core or loss-making businesses, including its Swiss unit and shares in M&C Saatchi South Africa Group.

Recently installed chief executive Zaid Al-Qassab said the "strong" first-half numbers showed "the benefits of our ongoing transformation and diversity of our specialisms.

"We are creating a more agile, regional-first operating model which focuses on growth.

"Looking forward, despite continued volatility within our markets, we are confident that we are on track to deliver against market expectations for the 2024 full year, while noting the tougher second-half comparators."

Analysts currently expect M&C Saatchi to post full-year pre-tax profits of £34.4m on net revenues of £249.6m. The firm is also targeting annualised savings of £10m by the year end, having delivered £4.5m in the first half.

On a statutory basis, interim revenues eased 1% to £213.6m, while pre-tax profits came in at £11.3m, from a £5.1m loss a year previously.

Al-Qassab, Channel 4’s former chief marketing officer, took up the reins in May.

As at 0850 BST, shares in M&C Saatchi were up 2% at 195p.