Saatchi buoyed by new business wins
Advertising agency M&C Saatchi lifted half-year profits almost 9% today after securing new contracts with London’s Olympic bid team and Thames Water.
The company, which joined the stock market in July, also hailed the success of its operations in Asia and Australia as it revealed profits hit £4m (€5.9m).
Although profits in the UK were flat, the new business wins helped offset decisions by retailer Matalan and car company Rover to take work in house.
Lord Maurice Saatchi and his brother Charles helped set up the business in 1995 after a dispute with shareholders of Saatchi & Saatchi, the advertising firm that the two brothers created in 1970.
Clients, who include British Airways, Scottish & Newcastle, Dixons and Royal Bank of Scotland, are now served by 700 staff in 11 countries.
Today’s results were driven by the performance of the Asia and Australia division, where pre-tax profits rose to £700,000 (€1m) from £185,000 (€271,000) last time.
The US also showed “encouraging” progress after new contracts were signed with existing clients in Los Angeles.
Revenues at the UK arm were broadly unchanged at £17.6m (€25.8m) in the six months to June 30, while pre-tax profits dipped to £3.26m (€4.8m) from £3.29m (€4.8m).
The update helped lift shares by nearly 2% to 134p, higher than the original flotation price of 128.5p – valuing the company at £69m (€101.1m). Proceeds from the listing have been earmarked to fund an expansion in Europe.
Chief executive David Kershaw said: “We continue to make good progress with our organic growth strategy and are encouraged by the new business performance in the first half of the year.”
He said the company had made a “solid start” to the second half of the financial year with new business wins including Harrods. This left the group comfortable with expectations for the full year.
Analysts are expecting pre-tax profits of £8m (€11.7m) for the year to December 31, against £6.5m (€9.5m) last time.
