M&C Saatchi pre-tax profit rises 17% for first half of 2014

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

M&C Saatchi has reported pre-tax profit of £8.5 million for the first half of the year, up £1.2 million year on year.

The group's revenues rose by three per cent to £82.6 million in the first half of 2014, with strong growth in the UK where revenues have risen by 17 per cent.

Pre-tax profit rose 17 per cent to £8.5 million from £7.3 million for the same period in 2013. Profits after tax were £6.1 million.

The network, which includes UK digital and integrated agency Lida, delivered an operating margin of 9.7 per cent, up from 8.5 per cent in 2013.

Speaking to Campaign, chief executive David Kershaw said: "The strongest performer in the UK was Lida with big CRM wins from John Lewis and Land Rover. It’s responsible for approximately half the growth in the UK.

 "A lot of the UK growth is because we have kept investing in new business and channels and we’ll continue to do that. We are looking at making further investment in the content side, in particular, video."

The company is continuing its investment in its New York office, where its revenues are up 57 percent and is looking at an associate investment to accelerate growth.  

Kershaw told Campaign that the advertising side of the business had not grown as quickly as hoped and that there would be further developments regarding how the agency business will be managed, before the end of the year.

In May, the company bought UK digital shop, Lean Mean Fighting Machine, which will physically move in into M&C Saatchi’s London headquarters next month. Revenues associated with LMFM will not be seen until the second half of 2014.

Like-for like revenues in the Middle East and Africa are up by 11 per cent, but are down by three per cent in Asia as a result of the loss of retail account, David Jones.

Kershaw said: "Our results for the first six months of 2014 showed continued revenue momentum and excellent earnings growth and give us confidence for a successful full year outcome.

"This success is based upon a combination of new business wins in our core operations and a growing contribution from our developing new businesses. Most of these have yet to reach their full potential and we are anticipating even better returns in 2015."

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