Profits at Saatchi & Saatchi London have slumped nearly 30 per cent
year on year during the first six months of 1998, according to the first
interim results released since Saatchis' demerger from Bates last
Bob Seelert, chief executive of the Saatchis holding company, said the
results were disappointing in London: 'The figures are what they
We made some decisions at the back end of last year and perhaps we
overdid it a bit in view of everything that's happened. In the past few
months we've had less success than we'd have liked.'
Since the start of the year, the Charlotte Street agency has lost its
high-profile National Lottery account as well as a prestigious global
pitch for Schweppes.
Seelert ascribed the downturn to higher staff and IT costs, as well as
the absence of two large projects - Ciba and Norwich Union - which had
inflated the figures for the first half of last year. Profits fell 28.9
per cent to pounds 3.2 million in the UK, while revenues for the period,
which covered the six months ending 30 June 1998, declined by 2.2 per
cent to pounds 30.6 million.
Seelert said changes designed to lift London's game had already been put
in place with the departure of the UK chairman, Alan Bishop, for a
global new-business role and the decision of top management to devote
more time to London (Campaign, 17 July).
The London results provided the one black spot in a set of results that
were positive for the group as a whole, with a strong US performance and
the sale of the corporate identity company, Siegal & Gale.
'The UK accounts for 16.7 per cent of group revenue,' Steve Waring, a
partner at the advertising accountancy specialist, Willott Kingston
Smith, said. Globally, operating profit rose 24 per cent on revenues up
0.5 per cent to pounds 183.3 million.