Advertising giant M&C Saatchi reported a near 10 per cent increase in revenue and 52 per cent rise in profit before tax from last year, despite the ongoing drama of its hostile takeover.
The London-listed creative company increased its headline operating profit margin by 14 per cent.
M&C Saatchi had almost £40m in net cash, up from £32m, driven by bringing in new clients including Barclays, Samsung and Pepsico .
It had £16m in headline profit before tax, up 52 per cent from the first half of last year, while its statutory profit was at just £0.3m, compared to £4.8m in 2021, due to transaction costs involved in the takeover.
“Results to be proud of under any circumstances”, said CEO Moray MacLennan “but particularly with the distraction of a hostile takeover.”
Chairman Gareth Davis heralded its profit before tax of more than 52 per cent, as “an outstanding achievement by our management team.”
“Despite considerable challenges created by a prolonged hostile takeover process, and strengthening economic headwinds, focus has been maintained on client services and growing the business.”Chairman Gareth Davis
The firm said it had spent £8.4m fending off takeover approaches by both Next Fifteen and Vin Murria’s investment vehicle AdvancedAdvt.
Davis said the performance “reinforces the Board’s belief in a strong independent future for M&C Saatchi” after it “laid out its concerns over the low value and high risks involved in ADV’s hostile bid.”
These concerns have been significantly increased due to ADV’s continual refusal to seek US government regulatory approval (CFIUS). It is our belief that this could lead to the termination of key client contracts.
I would respectfully request that shareholders support us in retaining our independence and therefore take no action at this time.”
Shares in the ad titan dropped nearly five per cent this morning.