Saatchi & Saatchi in the UK has reversed its poor financial
performance in the first half of last year to turn in a year-on-year
rise in operating profits of 40 per cent for 1998.
Revenue still fell by 1.5 per cent, reflecting the loss of high-profile
accounts, including Camelot and Schweppes. But profits hit pounds 7.6
million, thanks to a reduction in overheads. Last October, the London
agency made 20 redundancies in account-handling and planning.
Bob Seelert, the chairman of the Saatchi holding company, commented:
’London didn’t have the best year in history. We over-invested in 1997,
but we have trimmed back since then and have a fantastic agency in the
Seelert dismissed speculation that the relaxation of Procter & Gamble’s
client conflict policy could make Saatchis a takeover target. ’The
reality is we are well-positioned for success on the global stage and we
don’t need any partners,’ he said.
Worldwide profits before tax rose 31 per cent to pounds 30.7 million on
revenue up 5.9 per cent to pounds 363 million, thanks to global business
wins including Rothmans, Audi, France Telecom and Beck’s.
New business wins from existing clients included Oil of Olay and Sunny
Delight from P&G, plus the pan-European launches of the Toyota Yaris and
Seelert said the company’s goal for 1999 was to increase profit margins
to 10 per cent from 9.3 per cent last year. ’I go into this year with
more optimism than ever before,’ he said. ’We have built up a great
new-business momentum and Procter & Gamble, Hewlett Packard and Toyota
are all looking very strong.’
Profits at the UK agency fell by 30 per cent year on year in the six
months to 30 June 1998, causing a depressing set of first interim
results for the demerged agency network.
In July, Alan Bishop, the UK chairman, was moved to a global
new-business role and Kevin Roberts, the worldwide chief executive,
vowed to spend more time overseeing the London agency.