Advertising agency M&C Saatchi revealed today that its pre-tax profits have fallen by 10% to £28.7m over the past 12 months.
The decline came as a result of a drop in marketing spend by large technology businesses.
Overall net revenues fell by 7% to £252.8m as a result of a number of disposals made to streamline the group. Operating profits dropped 8% to £32.4m.
“Whilst the operating environment in 2023 was challenging, it was a really strong performance in what has been a year of change,” said M&C Saatchi chair Zillah Byng-Thorne.
“Lots of the big tech heavy businesses had a hard time last year. We’ve continued to see momentum in that top line, and materially better margins in this quarter compared to this time last year.”
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M&C Saatchi’s media business was hit hardest, falling by 21% from last year on a like-for-like basis, while advertising was hit by an 8% like-for-like drop.
On the positive side, more than 200 new business wins for the agency included big consumer brands such as Porsche, Adidas, Nike and McDonald’s.
“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,” said Byng-Thorne.
“There is much more to do on simplifying how we interact with our clients and evolving our go-to- market strategy. With strengthened cash generation, we expect to re-invest in value accretive opportunities to enhance our shareholder returns.”
The results come as former CEO Moray MacLennan, who had been at M&C Saatchi for ten years, is set to be replaced by former channel 4 executive Zaid Al-Qassab from next month.
Byng-Thorne also highlighted that the business has invested heavily in its leadership team, and will be appointing a new global chief creative officer this year, having recently hired a new COO.
