Shares in M&C Saatchi jumped this morning after the advertising group narrowed its pre-tax loss and forecast full-year trading ahead of expectations.
The London media firm posted a 12 per cent drop in revenue to 2020 to £225.4m as the pandemic sparked a sharp fall in advertising spend.
But pre-tax loss narrowed from £8.6m to £8.5m as the company slashed costs.
M&C Saatchi was also boosted by new business from clients including Tiktok, Lexus, Tinder and the government.
The ad firm also struck an upbeat tone about its outlook for 2021, saying trading was ahead of expectations for the first five months of the year.
Underlying pre-tax profit for the first half of the year is expected to hit £10m, up from £2m in the same period last year.
Shares rose as much as eight per cent after markets opened this morning, before settling five per cent higher.
Under chief executive Moray MacLennan the ad group has looked to simplify its business and draw a line under an accounting scandal that sparked a board overhaul and led to the departure of founders including Maurice Saatchi.
The company sold, closed or merged 20 divisions last year and its number of operating entities is now a third lower than at the end of 2019.
It has also set out a new strategy targeting revenue growth of six per cent and a rise in operating profit of more than 25 per cent by 2025, as well as cost savings of roughly £30m.
M&C Saatchi did not pay a dividend for the year, adding that its priority was to return to pre-pandemic levels of profitability and then hit its new targets.
Boss Moray MacLennan said 2020 was “undoubtedly a watershed year” for M&C Saatchi.
“This initial success and our continued focus on innovation, technology and data, combined with creativity, which is at our core, gives us confidence for the remainder of the year and beyond.”