M&C Saatchi posts revenue growth but UK slows and Japan underperforms
M&C Saatchi has posted a jump in revenue of 15% in the first half of 2016, but the agency group saw its UK numbers slip slightly on the back of client losses in 2015.
Reporting on Australia and Australasia, the company saw like-for-like revenues rise by 5% to £22.787m on the back of its win of Woolworths earlier in the year followed by BBQs Galore, Ebay and Menulog. The region posted an operating profit of £2.56m.
While Malaysia and Singapore were noted as regional highlights, poor returns in Japan has seen the region reduce its holdings in M&C in Japan to just 10%.
The US was a highlight region, with like-for-like earnings up 27% and an increase in operating profit of 95% to £3.4m.
Overall revenue for the first six months rose to £100.2m, up from £87.5m on the first half of 2015, while profit before tax was up 19% to £11.4m and earnings up 22% to £7.7m.
M&C Saatchi CEO, David Kershaw, said the despite the slight slip in the UK, the group was moving ahead.
M&C’s David Kershaw: Japan performed poorly while the USA enjoyed an increase in operating profit of 95%
“Momentum across the Group remains strong, producing positive revenue and earnings growth over the first six months of 2016,” Kershaw said.
“We are well-positioned and see significant opportunities from our breadth of offer in the fastest-growing segments. The second half has started well, with trading in line with expectations. We continue with the proven strategy.”
The company noted that in the UK headline operating profit was down by 10% on the previous year but was impacted by restructuring costs.
“M&C Saatchi PR and our Sport & Entertainment division as well as our research operation The Source all performed strongly,” the announcement said.
“However, this growth was offset by the impact of 2015 client losses within the advertising agency. We experienced a favourable run of account wins across our group of businesses in the first half, including Ageas, Alibaba, the Department of Work and Pensions, E.ON, the Home Office, Open University, Rail Delivery Group and further work for Royal Mail.”
In Europe headline operating profit rose 51% while like-for-like revenues in the Middle East and Africa lifted 19%.
M&C said the second half of the year had already started well and there had been impact from Brexit.
“We have not seen any impact as a result of the Brexit decision other than a positive foreign currency impact,” it said.
