M&C Saatchi profits suffer in the slump
ADVERTISING group M&C Saatchi yesterday reported a 32 per cent drop in first-half profit, driven by the “unprecedented pressure” felt by its clients in the downturn.
M&C – which was founded by Maurice and Charles Saatchi – said that client uncertainty over budgets had impacted both its revenue and profitability.
However, it added that trading had stabilised during the second half of the year.
“The encouraging thing is that we don’t see further declines in the market, but on the other hand we are not seeing any signs of real growth,” said M&C chief executive David Kershaw
“The new business has been steady but there is no huge win which would suggest that the second half will not be dramatically different from the first half,” he added.
The company said that pre-tax profit was £5.4m for the six months ended 30 June, compared with £8m in the previous year, and that it will pay an interim dividend of 0.87p per share. Total revenue fell 3.8 per cent to £49.8m.
This year the company opened three new offices in Geneva, Sao Paulo and Tokyo, which contributed a planned revenue of £0.2m and an operating loss of £0.6m. The company expects these businesses to incur losses in the first two years of operation.
Shares in the advertising group, which have gained 33 per cent in the last three months, closed broadly flat at 82p.