M&C Saatchi posts strong first-half financial performance

Total pre-tax profits grew by 13% in the first half of the year, with the UK operation reporting solid growth.

M&C Saatchi: UK clients include the Financial Conduct Authority
M&C Saatchi: UK clients include the Financial Conduct Authority

M&C Saatchi has claimed that creativity "cannot be automated" as it unveiled a 13% increase in statutory pre-tax profits to £11m in the first half of the year, boosted by a strong performance by its UK operation.

The listed global marketing services group reported like-for-like top-line growth in all regions compared with the first six months of last year apart from the US, which posted similar revenues to the same period last year. 

Gross profit, M&C Saatchi's term for revenue minus pass-through costs, rose by 5% year on year to £127.2m.

Like-for-like gross profit grew 10% in the UK, supported by wins including Twinings and Legal & General for the eponymous ad agency. The agency's new management team – chief executive Giles Hedger, chief strategy officer Raquel Chicourel and chief marketing officer Kate Bosomworth arrived in the past year to join chief creative officer Justin Tindall – are performing "well", the group reported.

Financial analysts Numis highlighted improvement in the group’s operating margin in the UK (where it is up from 13.2% to 16.5%), Asia and Australia.

M&C Saatchi highlighted its "market-beating growth", adding: "Our client base is broad and diverse, not dependent on pressured multinational goods companies. Our integrated client offering, which delivers greater effectiveness and efficiency to our clients, is not reliant on shrinking media margins. Creativity, which cannot be automated, remains at the core of our approach."

According to group chief executive David Kershaw, the second half of the year has started well and is in line with expectations, and the group is targeting further new businesses and offices.

During the first half of the year, M&C Saatchi launched Majority in Los Angeles, a production company with an all-female roster of directors that has already won three commercial projects.

Acquisitions in the period include 51% of Mumbai-based creative agency Scarecrow, which has expanded to Jakarta and Hong Kong, and 51% of two UK social influencer agencies, Red Hare Digital and Grey Whippet, to form M&C Saatchi Talent Group along with M&C Saatchi Merlin.

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