M&C Saatchi profits suffer in the slump

ADVERTISING group M&amp;C Saatchi yesterday reported a 32 per cent drop in first-half profit, driven by the &ldquo;unprecedented pressure&rdquo; felt by its clients in the downturn.<br /><br />M&amp;C &ndash; which was founded by Maurice and Charles Saatchi &ndash; said that client uncertainty over budgets had impacted both its revenue and profitability.<br /><br />However, it added that trading had stabilised during the second half of the year.<br /><br />&ldquo;The encouraging thing is that we don&rsquo;t see further declines in the market, but on the other hand we are not seeing any signs of real growth,&rdquo; said M&amp;C chief executive David Kershaw<br /><br />&ldquo;The new business has been steady but there is no huge win which would suggest that the second half will not be dramatically different from the first half,&rdquo; he added.<br /><br />The company said that pre-tax profit was &pound;5.4m for the six months ended 30 June, compared with &pound;8m in the previous year, and that it will pay an interim dividend of 0.87p per share. Total revenue fell 3.8 per cent to &pound;49.8m.<br /><br />This year the company opened three new offices in Geneva, Sao Paulo and Tokyo, which contributed a planned revenue of &pound;0.2m and an operating loss of &pound;0.6m. The company expects these businesses to incur losses in the first two years of operation.<br /><br />Shares in the advertising group, which have gained 33 per cent in the last three months, closed broadly flat at 82p.