M&C Saatchi expects Xmas adverts boost

Steve Dinneen
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AD AGENCY M&C Saatchi hopes a bumper Christmas for retailers will help it beat full-year expectations.

The update came as Saatchi posted a 17 per cent rise for pre-tax profit to £6.3m and the same size sales rise to £58.2m, for the six months to the end of June.

The news adds to hopes that the UK is mounting a sustained recovery, with advertising seen as a barometer for the wider economy.

However, the firm remains cautious about next year, saying the market is still unpredictable.

Saatchi also announced it has added the Olympic Delivery Authority to its client list.

Analysts at Numis said the half-year results were “excellent”, raising their rating to “buy” from “add” and target price to 147p from 131p.

Chief executive David Kershaw said he expected analysts to raise their revenue predictions for the year to £116-117m, from about £110m, and also nudge up their pre-tax profit numbers.

He said: “I think you will see a vibrant, competitive Christmas ahead for our retailers, which is why we can certainly see visibility through to the end of this year, and financial services is still very competitive.”

Kershaw added: “If you could lock in the current trading we would all be very happy. Any concerns are about what might happen in the course of the next year.”

In March the ad agency revealed a 27 per cent drop in full-year pre-tax profit on flat sales. However, it predicted sales would pick up in 2010.

It also announced a tie-up with the Tories in the run up to the general election, renewing a relationship that spans decades and includes the iconic “Labour isn’t working” poster in 1979.