M&C Saatchi posts 27% dip in profits

LONDON - M&C Saatchi has reported a 27% drop in pre-tax profit after a "challenging and unpredictable year" in 2009.

David Kershaw: M&C Saatchi chief executive
David Kershaw: M&C Saatchi chief executive

The agency's financial results for the year ending December 2009 out today revealed the agency's pre tax profits were £10.3m, down from £14.1m in 2008.

Agency revenue dropped 6% to £49.1m in the UK, while group revenues in 2009 for the agency globally fell 5% to £103.4m.

The agency's best performing regions were Australia and Malaysian, with growth of 12% partially offsetting falls elsewhere.

Across the group the impact of the challenging trading market resulted in revenue reductions by 3% across Europe, while its US operations suffered a major blow declining by 37%. M&C Saatchi's consulting business Clear was down by 8%.

David Kershaw, M&C Saatchi chief executive, said: "M&C Saatchi has delivered in a challenging and unpredictable year.

"Through 2009 we kept a control on costs, ensuring that we maintained investment in the business. The group is well placed to grow as the economic environment improves."

M&C Saatchi, which has a stake in media agency Walker Media, reported media related activity has been "more significantly affected by volume" throughout the year, but cited high client retention as curtailing revenue decline to 11%.

The agency's three new offices that opened across Geneva, Sao Paulo and Tokyo last year together contributed to 1% of group revenues, although the £1.4m start-up losses incurred across the three new offices resulted in a 25% decline in operating profit to £10.4m from £13.7m in 2008.

Looking ahead, Kershaw said 2010 has started well, "both operationally and financially", but admitted "visibility remains an issue".

Campaign has today revealed the agency has also been drafted in by The Conservative Party to work alongside Euro RSCG to work on its advertising.

Picture credit: Phil Rudge