M&C Saatchi warns of 'small decline' in full-year LFL net revenue

The advertising company said that "the more challenging trading environment" widely reported across the sector and previously referenced in its 2022 results has continued, and has impacted the pace of business into the second quarter, particularly in the advertising and media specialisms.

Nevertheless, the firm is benefiting from its diverse range of businesses, with the Passions, Consultancy and Issues specialisms continuing to perform strongly.

"Whilst we expect a small decline in like-for-like net revenue for the full year, we remain confident in delivering year-on-year headline profit before tax growth and headline operating margin improvement," it said. "This will be achieved through a combination of the high operational gearing inherent in the business model, targeted cost savings and the global cost efficiency programme."

As a result, headline pre-tax profit it set to be "significantly" weighted towards the second half, although net revenue is expected to be more evenly spread.

"The board remains confident in its strategy and the medium-term growth targets set out at the capital markets day held in February 2023, driven by the quality of its diverse set of businesses," it said.

At 1425 BST, the shares were down 9.1% at 157.64p.