M&C Saatchi proclaims a ‘turning point’ with a return to growth

Embattled communications network M&C Saatchi has proclaimed a ‘turning point’ in its performance after posting better-than-expected interim results for the six months to June 30.

M&C Saatchi finds its financial footing

  • A steady stream of bad news in recent years has been punctuated by a 14.7% rise in gross revenues to £171.2m from the same six-month period a year before, with net revenues rising 14.2% to £118.1m.

  • On a like-for-like basis the group’s performance, which counts 2,400 employees spread across 24 global locations, was even more impressive, jumping 21% once the impact of recent acquisitions and sales are discounted.

  • Headline operating profit meanwhile rose to 10.5%, up from 4.1% in the first half of 2020, with profit before tax weighing in at £10.5m, an impressive 420% uptick on the paltry £2m generated a year prior.

A recipe for success

  • M&C Saatchi cites operational changes for helping to fuel the turnaround in its fortunes, including an embrace of digitalization and the launch of data consultancy Fluency.

  • The group has also been able to retain its clients through the lean times, with the likes of Reckitt, GSK, Lexus and Sonos remaining on board. Old hands have been joined by new clients including Uber, Delonghi and Franklin Templeton.

The road ahead

  • Chief executive officer Moray MacLennan said: “These results mark a key turning point for M&C Saatchi. We have returned to growth with H1 profits not only substantially ahead of 2020, but also surpassing 2019. Our focus on simplification and control has continued to strengthen both our operating margin and balance sheet, which enables us to successfully pursue our strategy for growth.”

  • M&C Saatchi’s newfound sunny disposition extends into the second half, with recent momentum likely to propel the organization further through the next six months.

  • Should this come to pass then full-year profit before tax and earnings are likely to be ‘substantially’ ahead of the forecast consensus.

  • A heavily-laden war chest will see M&C Saatchi invest in organic startups through the second half, including digital transformation and ESG consultancies and the SaaS content creation platform for SMEs.

  • This follows M&C Saatchi’s ‘unhappiest year ever’ following a litany of accounting problems and the departure of its founders.