M&C Saatchi reported a better than expected first half year with profits ahead of pre-pandemic levels.
Headline profit before tax was £7.1 million and 209% ahead of the same half year in 2019. Like-for-like net revenue was up 21% for ths six months to June. Gross revenue was £171.2 million, up 14.7%, and net revenue £118.1million, up 14.2%.
This momentum has continued into the second half of the year with client retentions and new wins, the company says.
Full year profit before tax and earnings is expected to be substantially ahead of consensus estimates.
"These results mark a key turning point for M&C Saatchi," says CEO Moray MacLennan.
"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.
"We have made rapid progress in the implementation of this strategy, most notably in accelerating M&C Saatchi's proven expertise in providing digital and connected marketing solutions to meet the demands of a growing market.
"Our confidence in the future is reflected in the post-period-end decision to settle current put options in cash with the expectation that this continues thereby eliminating dilution for shareholders."
In Asia and Australia, net revenue increased by £4.5 million or 17% to £30.9 million.
Media agency Bohemia in Australia reported year-on-year growth in revenue related to new business wins, along with an increase in organic growth with recurring clients.
The company says strong revenue growth was reported by the Re Agency in Australia.
However, M&C Saatchi recognised an impairment relating to an intangible film asset in Australia of £885,000. The company says: "As a result of the prolonged lockdown in Australia and a sluggish movie distribution market across the world, we no longer believe that this intangible asset is recoverable."
The company says there is a renewed belief in marketing.
In its half year results, M&C Saatchi says: "Whilst the onset of the pandemic created uncertainty around client investment, we are now seeing a renewed belief in marketing as the key lever for growth.
"Marketing spend levels are increasing as brands take advantage of stronger economic indicators and the recovery in consumer spending."
Half year numbers:
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