The advertising and communications group posted net revenue of £103.8 million, down 5.1%
LONDON: M&C Saatchi PLC (SAA.L) reported a 36% drop in like-for-like operating profit for the six months ended June 30, 2025, as macroeconomic uncertainty and client caution weighed on second-quarter performance, particularly in Australia.
The advertising and communications group posted like-for-like net revenue of £103.8 million, down 5.1% from £109.4 million a year earlier. Statutory net revenue fell 7.7%, impacted by the disposal of its South Africa business.
Operating profit declined to £10.3 million from £16.1 million on a like-for-like basis, while statutory operating profit dropped 45.3% to £7.5 million. Profit before tax fell 48.1% to £6.9 million on a like-for-like basis, and 60.2% to £4.3 million on a statutory basis.
The company cited a sharp 26.5% revenue decline in Australia, driven by exposure to consumer-facing clients and prior-year client losses. In response, M&C Saatchi implemented leadership changes, closed an unprofitable media unit, and launched restructuring efforts aimed at restoring profitability.
Excluding Australia, group net revenue was broadly flat, with growth in Issues (+6.3%), Media (+5.4%), the Middle East (+46.6%) and Europe (+5.7%) offsetting declines in project-based consulting and PR.
Despite the revenue headwinds, the company reaffirmed its full-year profit guidance, supported by £12 million in annualised cost savings. Half of these savings are expected to be realised in 2025, driven by middle-office efficiencies and restructuring in Australia.
CEO Zaid Al-Qassab said the group remains focused on its transformation programme and pipeline momentum, noting strong client retention and new wins including Stockland, Screwfix, GoPuff, and the US Soccer Federation.
M&C Saatchi ended the period with adjusted net cash of £11.2 million and a strong operating cash conversion of 137%, enabling dividend payments and strategic M&A activity.
The company expects full-year like-for-like revenue to decline by mid-single digits but anticipates a return to growth and margin improvement in the medium term.