M&C Saatchi UK revenue down after ad agency client losses

Client losses at M&C Saatchi have led to a fall in UK revenue for the group, the company has said in its latest earnings report.

Transport for London: ended 15-year relationship with M&C Saatchi
Transport for London: ended 15-year relationship with M&C Saatchi

In its six-month results to 30 June 2016, the M&C Saatchi group posted a 1% decrease in UK revenue, with growth in CRM, mobile, PR and sport & entertainment offset by account losses at the ad agency.

Losses included Transport for London, an account held for 15 years which went to VCCP in April, and Virgin Holidays, which was won by Abbott Mead Vickers BBDO in the same month. 

UK headline operating profit was 10% down on 2015, but included restructuring costs of £660,000 in the ad agency. M&C Saatchi said operating profit would otherwise have grown 2% year on year.

For the group, pretax profit was up 18.8% year on year to £11.4m, while revenue climbed 14.5% to £100.2m (6% on a like-for-like basis).

M&C Saatchi is also finalising the 30% stake in the ad agency to be sold to the management team, as revealed by Campaign in January.

The ad agency is looking for a new chief executive after the departure of Tom Bazeley last month. Bazeley co-founded digital agency Lean Mean Fighting Machine, which was bought by M&C Saatchi in 2014.

After M&C Saatchi's last full-year earnings report in March, group chief executive David Kershaw told Campaign the ad agency was the most "disappointing part of the business".

Today Kershaw said: "Momentum across the group remains strong, producing positive revenue and earnings growth over the first six months of 2016.

"We are well positioned and see significant opportunities from our breadth of offer in the fastest growing segments. The second half has started well with trading in line with expectations. We continue with the proven strategy."

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