Shares in M&C Saatchi pushed more than seven per cent higher this morning after it lifted forecasts for the full year, marking a welcome boost for the troubled ad agency.
The London-listed group had previously forecast pre-tax profit of £4m for 2020, but now expects an upward revision of this figure after delivering better-than-expected trading in the fourth quarter.
Net cash of £33m was significantly ahead of the £10m previously forecast.
The upbeat figures come as M&C Saatchi battles to draw a line under a dramatic accounting scandal that began in 2019.
In November the company’s three remaining founders — Jeremy Sinclair, David Kershaw and Bill Muirhead — stepped aside. This followed the departure of founder Maurice Saatchi and three independent directors.
Last month its shares resumed trading following a 10-week market suspension prompted by the bookkeeping error, which saw the company overstate profits by £14m in accounting irregularities dating back to 2014.
Moray MacLennan, who took over from Kershaw as chief executive, today unveiled a new strategy in a bid to turn around the company’s fortunes.
M&C Saatchi said it would target revenue growth of six per cent and a rise in operating profit of more than 25 per cent by 2025.
The ad firm will also look to make cost savings of roughly £30m per year over the next five years.
“Thanks to the resilience, agility and determination of our people, and the loyalty of our clients, we have emerged from the most difficult period in our history — amidst a global pandemic — with real strengths,” said MacLennan.