M&C Saatchi’s like-for-like net revenue growth is running in the “low single digits” so far in 2024 as restructuring and cost cutting takes hold.
The global advertising group, like most of its peers, has been dragged down by a contraction in ad spend by the technology sector.
This led to a weaker revenue in 2023, sparking a restructure to create a leaner, more agile business, described as “simplification”.
Part of that was a review of loss-making businesses. M&C Saatchi has been closing, winding down or selling to local executives its offices throughout the world, including Sweden, South Africa, China, Hong Kong, Indonesia and Singapore.
Asia and Australia have been merged into a new APAC region, managed from Australia by Justin Graham.
In a trading update before the global advertising group’s AGM, the company announced the divestment of M&C Saatchi (Switzerland) SA\ to the local director,Olivier Girard, for “nominal” price.
M&C Saatchi said year to date performance has continued the good momentum in the second half of 2023 and is well ahead of the challenging prior year.
“Overall, we are trading in line with expectations,” the company said in a statement to the London Stock Exchange.
“Like-for-like net revenue growth is low single digits, as expected, reflecting improved performances in Advertising and Media, and continuing strong growth in Issues.
“Our focus on profitability has ensured that operating margins are well ahead of prior year. Net cash has also continued to grow since the 2023 year end.”
M&C Saatchi said the sale of various overseas operations and cost cutting has significantly enhanced profitability.
“We are on track with the program to deliver the £10 million of annualised cost savings by the end of 2024,” the company said
“The structural changes we are making to our cost base, alongside our new operating model, are expected to increase operational leverage and help to support margin expansion and cash generation.”
M&C Saatchi posted a fall in profit for the year to December, down 31% fall to £7.3 million in statutory operating profit. Before tax profit was down 87% to £0.7 million. Net revenue for 2023 was down 7%, and 2% like-for-like, to £252.8 million.
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