M&C Saatchi reports falling profit amid ‘challenging’ advertising market
The group said that it is on track to meet expectations this year.
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Communications group M&C Saatchi said it was hit last year by a “challenging” market, which hit most businesses in the advertising industry.
The business saw its profit plunge in 2023, dropping by 87% to hit just £700,000 before tax, down from £5.4 million the year before. Revenue fell 2% to £453.9 million.
But the business said it was on track to meet expectations this year, after embarking on a cost-saving drive, which included measures to slim down its business.
The company sold part of its interest in its Swedish subsidiary, closed or wound down several smaller offices in Asia and exited some of its smaller businesses in the UK too.
This year the business sold its shares in three French investments and disposed of its shares in M&C Saatchi South Africa for £5.6 million.
That will be more or less the end of the plan to simplify M&C’s business portfolio, the company said, but executive chair Zillah Byng-Thorne said there is still “much more to do” in other areas.
2023 was a year of strategic progress. We have begun to transform into a leaner and more agile business laying the groundwork for sustained growth and improved profitability ahead
“2023 was a year of strategic progress. We have begun to transform into a leaner and more agile business laying the groundwork for sustained growth and improved profitability ahead,” she said.
“There is much more to do on simplifying how we interact with our clients and evolving our go-to-market strategy.”
During 2023, the business cut its annual costs by £3.9 million.
It has been a tough time for many advertising businesses. As the cost-of-living crisis squeezed customers’ wallets, they had less money left over at the end of the month to buy products they had seen in ads.
As a result, many companies have reduced their advertising spend during the year.
M&C said that while six months ago there were “early signs” that pressure was “easing on client marketing budgets,” this has now proven true.
“We delivered a materially better financial performance in the second half of the year, following the more challenging start to the year,” it said.