REG - M&C Saatchi PLC - Interim Results
Today 07:10
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RNS Number : 8572Z M&C Saatchi PLC 18 September 2025
M&C SAATCHI PLC
(the "Company", "M+C Saatchi" or the "Group")
Unaudited interim results for the period ended 30 June 2025
Solid start to the year impacted by Australia weakness and macro-driven
softness in Q2
Significant responsive actions in Australia to reshape the business and
support future profit delivery
Targeting FY profit in-line with prior year supported by £12m of annualised
cost savings
Financial Summary
Like-for-like (LFL) (1) results Statutory results
2025 2024 2025 2024
£m £m % change £m £m % change
Net revenue(2) 103.8 109.4 (5.1)% 103.8 112.4 (7.7)%
Operating profit 10.3 16.1 (36.0)% 7.5 13.7 (45.3)%
Operating profit margin 9.9% 14.7% (4.8)pps 7.2% 12.2% (5.0)pps
PBT 6.9 13.3 (48.1)% 4.3 10.8 (60.2)%
Net cash(3) 11.2 12.9 (13.2)% 8.7 12.9 (33.0)%
(1) Like-for-Like (LFL) results adjust statutory results to reflect the
underlying profitability of the business units, by excluding a number of items
that are not part of routine expenses including one-off and exceptional items
(defined as Headline Results), also excluding subsidiaries discontinued in
2024 and in 2025, and retranslating 2024 figures to 2025 FX rates. These
adjustments are set out below. We provide commentary on LFL figures, where
applicable, to provide a more comparable and better basis for understanding
our current and future performance. LFL adjustments are summarised below in
this section, in the Financial Review and at Note 1 of the financial
statements. All figures are subject to rounding.
(2) Refer to Notes for the definition of net revenue and net cash.
( 3) LFL net cash is adjusted to add back £2.5 million of restricted cash.
Net cash is £11.2 million. South Africa cash still included in balance sheet
line.
Financial and Operational Headlines
· 5.1% LFL net revenue decline after a solid start to the year due to
softer Q2 performance, impacted by an uncertain macro environment causing
near-term client caution, deferred project spend, particularly in Australia
(which has greater exposure to consumer-facing clients and annualised prior
year client losses)
· Responsive action in Australia in Q2 with new leadership, the closure
of an unprofitable full-service Media business as well as restructuring, to
improve profitability and reshape the business
· Excluding Australia, which declined by 26.5%, Group LFL Net revenue
was broadly flat (-0.7%) with continued growth in Issues (+6.3%), Media
(+5.4%), the Middle East (+46.6%) and Europe (+5.7%)
· Non-Advertising specialisms declined 2.8% (flat excluding Australia),
with ongoing growth in Issues and Media offset by project-based Consulting
(-16.8%) and Passions and PR (-8.8%)
· Advertising overall declined 9.5%, (-2.5% excluding Australia), with
growth in the US, the UAE and Europe countered by the Australian decline
· Half year decline in LFL operating profit of 36.0%, with LFL
operating margin at 9.9% (-4.8pps). This was primarily driven by the
annualisation of prior year investments and strategic investments in Q1, with
the revenue shortfall in Q2 magnifying the impact
· Group continues to hold material cash balances with H1 adjusted net
cash of £11.2 million (H1 2024: £12.9 million) with strong operating cash
conversion of 137% 1 (#_ftn1) , enabling FY dividend payment, strategic
bolt-on M&A transaction of Dune 23 and put option settlements
· Client retention remains strong, with clients who represented 93% of
spend in 2024, also spending in H1 2025 alongside 171 business wins 2
(#_ftn2)
· H1 saw strong and improving pipeline with recent new client wins
including Stockland, Screwfix, Lionel Messi energy drink Mas+, GoPuff and the
US Soccer Federation, plus increased project scope from existing clients such
as JP Morgan, adidas & Ballantine's, and strengthening pipeline
opportunities into H2
· Cross-sell strategic vision is generating momentum as the integrated
Regional-first model supports a wider market offer for clients such as Meta,
Aldar and CommBank
· Statutory results: £103.8 million net revenue (-7.7%), also impacted
by the disposal of the South Africa businesses. Operating profit £7.5
million (2024: £13.7 million) due to investments, only partly offset by the
increasingly positive mix from Non-Advertising Specialisms. Operating margin
of 7.0% (2024: 12.0%)
· Our strategy to focus on profitable, scale and growing businesses
continues with progress being made on divestitures of Malaysia, Pakistan &
Mexico, to become licensees as we maintain our footprint. The Group is also in
discussions to acquire the last tranche of put options for M+C Saatchi (Santa
Clara) Brazil, expected to close in H2
Outlook - Targeting FY Profit in line with prior year despite revenue
headwinds
Given the continuing macro headwinds as well as the significant drag of the
Australian business and despite the improving H2 pipeline momentum, the Group
now expects that FY LFL revenue will be down around mid-single digits.
The Group is targeting Full Year profit to be in line with prior year,
underpinned by our ongoing and accelerated global transformation programme,
structural changes and flexible management of a largely variable cost base. In
total the Group will deliver at least £12 million of annualised cost savings
in FY25, of which at least half will be realised in-year. This is based on:
· Phase Two of the transformation programme ongoing: Middle office
efficiencies are now expected to generate £5 million annualised savings (vs.
£3 million previously forecast)
· Restructuring programme: Predominantly across Advertising and
Consulting in Australia, as we reshape the business to focus on higher growth
areas, removing duplication and improving margins. This has already been
actioned and will contribute to an incremental annualised saving of at least
£7 million
Alongside our variable cost base which provides cost mitigation, the above
actions will further boost the Group's natural H2 margin step-up to underpin
our FY profit target.
Medium term outlook is a return to growth at improved margins underpinned by
our famous brand name, creative excellence, the integrated Regional-first
growth model, the new people and systems capabilities we have invested in, and
a diverse portfolio with strong pipeline.
Zaid Al-Qassab, Chief Executive Officer, said:
"After a solid start to the year, we have not been immune to the market
conditions of the wider industry, as clients reacted cautiously to the
geo-political tensions and the unstable macro-economic environment. This
particularly impacted our Australian business, which subsequently had an
adverse effect on the Group's first half results. Excluding Australia, the
Group would have been broadly flat which is testament to the strong underlying
business fundamentals. We continue to see positive momentum in our growth
engines, with Issues, Media, Europe and the Middle East, all continuing to
grow in the first half. We acted quickly to accelerate transformation cost
savings in order to maintain our investment in higher margin growth areas.
"Looking ahead, while we expect continued macro uncertainty in the second
half, we will focus on what is in our control, aiming to deliver on the
improving pipeline momentum. In the medium term, we continue to improve our
operating model, and the strength and diversity of our portfolio, meaning we
are well-positioned to deliver on our growth ambitions and to create value for
shareholders."
Operational and financial actions
The Group continues to pursue its operational transformation and has
maintained investment priorities to support our strategy to achieve long term
sustainable growth and create shareholder value:
1) Investing in higher margin growth areas:
· Targeted investments across products, tools and people to support our
"Golden Staircase" strategic vision
· Further development of Cultural Power and AI-driven tool stack,
including the Cultural Power Index, with the measurement framework now
expanded to cover 4,000 brands
· Two high-quality leadership additions across strategy, innovation,
digital experience and consulting
2) Strategic bolt-on M&A
· Strategic acquisition of Dune 23, an award-winning sports agency
based in Dubai and Abu Dhabi, in May 2025; the first M&A conducted by the
Group in seven years and in our fastest-growing region
· Whilst the Group remains aware of macro conditions, it remains agile
and active for bolt-on M&A opportunities, supported by a healthy net cash
balance, which can accelerate the growth potential of key markets and high
margin specialisms
3) Phase Two and additional structural changes: cumulative annualised
savings of at least £12m in 2025
· Cost saving efficiencies delivered through Phase Two of the
transformation programme total £5 million annualised, up from £3 million
previously committed, while the structural actions focussed in the Australian
market and initiated in Q2, are expected to generate at least £7 million
annualised
· The Group therefore expects to deliver at least £12 million in
annualised savings, with at least half being realised in FY 2025
M+C Saatchi 2025 H1 results presentation
Zaid Al-Qassab, Chief Executive Officer, and Simon Fuller, Chief Financial
Officer, will host an in-person presentation, which can also be joined online,
for analysts and investors at 9.00am BST on 18 September at 36 Golden Square,
London W1F 9EE
(https://www.bing.com/ck/a?!&&p=1f50cdf5de3e04aeJmltdHM9MTcyNTQ5NDQwMCZpZ3VpZD0xOGZiNzk4NS1lMDAzLTZlNGItMTg0Yy02ZGJhZTEyOTZmYTgmaW5zaWQ9NTQ4OQ&ptn=3&ver=2&hsh=3&fclid=18fb7985-e003-6e4b-184c-6dbae1296fa8&u=a1L21hcHM_Jm1lcGk9MTA5fn5Ub3BPZlBhZ2V-QWRkcmVzc19MaW5rJnR5PTE4JnE9TSUyNkMlMjBTYWF0Y2hpJTIwVGFsayZzcz15cGlkLllOMTAyOXg5NTgzMjU5NDc2MzYyMjI1OTIxJnBwb2lzPTUxLjUxMTk3NDMzNDcxNjhfLTAuMTM3NjQ4MDAxMzEzMjA5NTNfTSUyNkMlMjBTYWF0Y2hpJTIwVGFsa19ZTjEwMjl4OTU4MzI1OTQ3NjM2MjIyNTkyMX4mY3A9NTEuNTExOTc0fi0wLjEzNzY0OCZ2PTImc1Y9MSZGT1JNPU1QU1JQTA&ntb=1)
. To register, please email Headland Consultancy at
MCSaatchi@headlandconsultancy.com (mailto:MCSaatchi@headlandconsultancy.com)
.
A replay will be also available on the Company's website following the event
at https://mcsaatchiplc.com/ (https://mcsaatchiplc.com/)
Further information
M+C Saatchi +44 (0)20-7543-4500
Zaid Al-Qassab, Chief Executive Officer
Simon Fuller, Chief Financial Officer
Tom Fahey, Head of Investor Relations
Headland Consultancy +44 (0)20-3805-4822
Rob Walker, Charlie Twigg, James Waters MCSaatchi@headlandconsultancy.com (mailto:MCSaatchi@headlandconsultancy.com)
Panmure Liberum - Nominated adviser and joint broker +44 (0)20-3100-2000
Max Jones, Edward Mansfield, Will King
Deutsche Numis - Joint broker +44 (0)20-7260-1000
Nick Westlake, Iqra Amin
Group performance
Financial performance highlights
Like-for-like (LFL) (1) results Statutory results
2025 2024 2025 2024
£m £m % change £m £m % change
Net revenue(2) 103.8 109.4 (5.1)% 103.8 112.4 (7.7)%
Operating profit 10.3 16.1 (36.0)% 7.5 13.7 (45.3)%
Operating profit margin 9.9% 14.7% (4.8)pps 7.2% 12.2% (5.0)pps
PBT 6.9 13.3 (48.1)% 4.3 10.8 (60.2)%
EBITDA (3) 13.8 19.6 (29.6)% 11.1 17.5 (36.6)%
Net cash(4) 11.2 12.9 (13.2)% 8.7 12.9 (33.0)%
EPS (basic) pence 4.2p 7.8p (46.2%) 2.6p 6.6p (60.6%)
( )
(1 )Like-for-Like (LFL) results adjust statutory results to reflect the
underlying profitability of the business units, by excluding a number of items
that are not part of routine expenses including one-off and exceptional items
(defined as Headline Results), also excluding subsidiaries discontinued in
2024 and in 2025, and retranslating 2024 figures to 2025 FX rates. These
adjustments are set out below. We provide commentary on LFL figures, where
applicable, to provide a more comparable and better basis for understanding
our current and future performance. LFL adjustments are summarised below in
this section, in the Financial Review and at Note 1 of the financial
statements. All figures are subject to rounding.
(2) Refer to Notes for the definition of net revenue, and net cash. Net cash
includes £2.5 million of restricted cash.
(3) EBITDA is calculated excluding the income statement charges relating to
IFRS 16.
(4) LFL net cash is adjusted to add back £2.5 million of restricted cash. Net
cash is £11.2 million.
Our LFL net revenue decline of 5.1% reflects challenging market conditions,
particularly in Australia where very weak macro conditions, reduced client
spend from consumer facing businesses and annualisation of client losses have
had an adverse impact to the Group. Critically, the Group continued to invest
into the business for long term sustainable growth with investments across
products, tools and people which were largely first half-weighted. The Group
remains focussed on building on the successes of the recent transformation,
with Phase Two underway this year, in addition to structural changes and
global efficiency programmes aimed at mitigating operating costs. The
additional benefits of the exit from loss-making operations are, by
definition, excluded from the LFL measurement, but their removal has also
resulted in a higher quality, higher margin business.
The decline in profitability is largely driven by sustained targeted
investments by the Group (including the annualisation of prior year
initiatives) to support growth across the business in parallel to a revenue
shortfall, which more than offset the cost efficiencies achieved through our
continued operating model transformation initiatives. Phase Two, underway,
aims to deliver £5 million in annualised savings through Middle Office
efficiencies, up from £3 million originally communicated. This comes on top
of the £10 million achieved already in 2023-2024 through back-office
efficiencies with Phase One of the transformation. Additional structural
initiatives and extra cost saving efficiencies in 2025 will deliver at least a
further £7 million annualised in 2025, culminating in a total of at least
£12 million annualised cost efficiency savings in 2025. Group central costs
decreased on a like-for-like basis, through the success of our transformation
programme. However, costs are now centralised as part of our integrated
operating model, with cost reductions in local businesses.
LFL EBITDA declined by -29.6%, while LFL PBT declined by -48.1%.
Basic LFL EPS was 4.21p (H1 2024: 7.80p), with the decline driven by reduced
revenue. The remaining put option liabilities are expected to reduce further
over the short term, with a current residual liability of £3.5 million at a
170p share price (as at 30 June 2025).
The settlement of put options absorbed £0.5 million of cash while the 2024
dividend payment absorbed £2.4 million in the first half of 2025, leaving
adjusted net cash down -13.2% to £11.2 million, including restricted cash of
£2.5 million, down by £1 million. The adjusted net cash balance also
reflects the payment and other associated costs for the acquisition of Dune 23
as well as the divestment of Saatchinvest. Our continued focus on cash
management and improved working capital meant that our operating cash
conversion was strong at 137%, exceeding our long-term target of 80%, which
allows for some variability over the cycle.
Reconciliation of LFL to statutory results
The Group remains exposed to foreign currency exchange rate (FX) movements
impacting the translation of its overseas operations. LFL results are
presented using constant FX from the current period to ensure comparability
with the prior period. Key Group currency movements reflected weakness in most
Group international currencies, particularly the Australian Dollar and US
Dollar versus Sterling.
The table below sets out the reconciliation of LFL results to statutory
results, showing the forex and discontinued business effect.
Net revenue Operating profit
£m 2025 2024 Change 2025 2024 Change
Total LFL 103.8 109.4 (5.1)% 10.3 16.1 (36.0)%
Current currency adjustment 2.7 0.5
Exiting agencies 0.3 (0.1) 0.4
Other adjustments 3 (#_ftn3) (2.7) (3.3)
Total Statutory 103.8 112.4 (7.7)% 7.5 13.7 (45.3)%
Operating review
Net revenue Operating profit
£m 2025 2024 Change 2025 2024 Change
Non-Advertising Specialisms 69.9 71.9 (2.8)% 11.8 16.4 (28.0)%
Advertising 33.9 37.5 (9.5)% 1.7 4.1 (58.2)%
Central costs 0.0 0.0 - (3.2) (4.4) (27.3)%
Total LFL 103.8 109.4 (5.1)% 10.3 16.1 (36.0)%
Non-Advertising Specialisms declined 2.8% in LFL net revenue to £69.9 million
and contributed 68% of Group net revenue, while Advertising delivered £33.9
million (-9.5%).
The decline of our Non-Advertising Specialisms was largely driven by a decline
in Consulting (-16.8%), which continues to be impacted by project deferrals in
a challenging macro environment as well as Passions and PR (-8.8%), similarly
impacted by extra caution on spend for campaigns, particularly within the PR
business. These declines were unable to offset a positive performance in other
parts of the business, including the less-cyclical Issues specialism (+6.3%),
highlighting our leading market position working with the public sector which
remains a highly specialised field with specific expertise. Media continues to
build on growth in 2024 and grew 5.4% thanks to good progress in North
America. Advertising declined 9.5% largely due to weakness in Australia,
despite good growth in the US, the UAE and Europe. Excluding Australia,
Advertising would have declined by 2.5%.
Our higher-margin Non-Advertising Specialisms experienced a 28.0% decrease in
operating profit, with an operating margin of 16.9% (-590bps) reflecting both
a shortfall in revenue growth and continued targeted investments into the
business, slightly offset by mix improvements and proactive management of the
cost base. Advertising's -58.2% decline in operating profit, with operating
margin at 5.0% (-580bps), was largely driven by a significant topline decline,
most notably in Australia as well as FX impacts.
There was a decrease in LFL central costs on operating profit thanks to the
reduction of our cost base on the back of our ongoing transformation programme
and cost efficiency initiatives.
Specialisms LFL performance
Advertising
· 32% of LFL Group net revenue (H1 2024: 34%)
· LFL net revenue of £33.9 million -9.5% (H1 2024: £37.5 million)
The decline is largely driven by Australia where macro conditions remain
challenging, resulting in client caution around campaign spend, particularly
with consumer-facing businesses as well as annualisation of client losses.
These declines more than offset continued growth in the US, the UAE and Europe
which continue to show progress through a combination of new client wins and
repeat business. Excluding the very weak Australia, Advertising would have
declined by -2.5%. The reduction in Advertising Group net revenue share versus
2024 also reflects the disposal of the South African businesses. The outlook
for the rest of 2025 remains soft, driven by continued macro volatility and
subdued market conditions in Australia and the UK, offsetting stronger demand
in Europe, the US and the UAE.
Issues
· 27% of LFL Group net revenue (H1 2024: 24%)
· LFL net revenue of £28.1 million +6.3% (H1 2024: £26.5 million)
Good growth through a combination of existing client work and new wins within
multi-year framework agreements, albeit slightly tempered due to a temporary
pause in Q2 activity after uncertainty in US policy. The Group has proactively
invested into this Specialism, enhancing our non-UK footprint, our data
security capabilities and talent. We continue to develop our expertise in this
unique and highly specialised field, with strong barriers to entry, a
broadened client list and good new business momentum continuing into the
second half of 2025.
Passions & PR 4 (#_ftn4)
· 16% of LFL Group net revenue (H1 2024: 16%)
· LFL net revenue of £16.2 million -8.8% (H1 2024: £17.8 million)
Overall decline largely due to macro challenges causing reduced client spend
for campaigns. While the outlook for the remainder of 2025 is more
encouraging, conditions remain challenging and PR continues to be affected by
our exposure to the softer UK market.
Consulting 5 (#_ftn5)
· 13% of LFL Group net revenue (2024: 15%)
· LFL net revenue of £13.4 million -16.8% (H1 2024: £16.2 million)
Impacted by project deferrals due to macro challenges and also the severe
downturn in the Australia business. Sector challenges are expected to continue
this year given the wider economic pressures resulting in delays to project
start dates and deferral of client spend.
Media
· 12% of LFL Group net revenue (H1 2023: 11%)
· LFL net revenue of £12.1 million +5.4% (H1 2024: £11.5 million)
Media continues to grow through a combination of client wins and retained work
in North America and the UK. Whilst we remain cautious on the market backdrop
for the remainder of 2025, we are encouraged by recent wins, our healthy
pipeline and improving momentum on the back of our strong client offer.
Regional performance
The UK remains our biggest region, driven by the growth of Issues. APAC is
predominantly Australia, while Americas is dominated by the US market. In
Europe, the two largest markets are Italy and Germany. Since the sale of the
South Africa businesses, we no longer have an owned business in Africa. LFL
regional performance was as follows:
· UK: -3.0% as positive momentum in our specialist Issues business and
Media was offset by a soft performance in Advertising and Consulting
· APAC 6 (#_ftn6) : -22.7% as the macroeconomic environment in the
core Australia market remains very weak, impacting the Advertising and
Consulting businesses, driven by reduced client spend, particularly
consumer-facing businesses. This, coupled with client losses, drove a strong
decline in the period
· Americas: -3.0% largely due to project delays in Consulting,
offsetting growth in US Advertising
· Europe: +5.7% good growth continues across the board, particularly
Advertising and Sports and Entertainment through a combination of retained
work and new business wins
· Middle East: +46.6% thanks to continued strong growth in Advertising
in the UAE alongside positive momentum in our newly established local Sports
and Entertainment offering
Transformation Phase Two
Our 2025 transformation goals aim to set us up for future growth, alongside
ensuring efficiency and effectiveness. Our 2025 objectives are to:
1. Unite behind Cultural Power, our proposition to capitalise on our
unique understanding of the forces which drive purchase behaviour and brand
growth, delivered through the Cultural Power Index which helps our clients to
navigate a fragmented consumer and channel landscape
2. Bring the integrated, regional-first model to life, completing the
transition to the integrated suite of systems and digital tools, and evolving
the organisational design and incentives for greater simplicity, visibility
and accountability
3. Restructure the Middle Office capabilities with systems and services
for shared production, data and products, unlocking further efficiencies with
2025 annualised cost savings of c.£5 million, up from £3 million
4. Complete and improve our shared services in finance, HR, property,
IT, and procurement to simplify and improve revenue and profitability allowing
our people to do what they do best - creativity for clients
5. Right sizing the business for an evolving landscape, increasing the
margin in lower margin businesses
Cultural Power proposition - thriving in the complex and fragmented media
landscape
The Cultural Power proposition, launched this March 2025, helps clients
harness cultural forces to fuel desire, drive demand and deliver brand growth.
This is supported by the Cultural Power Index (CPI), our AI powered
measurement framework product that allows us to diagnose a brands current
cultural relevance compared to its competitors in order to optimise market
spend. The CPI has now expanded to cover over 4000 brands across our key
markets and is partnering with Oxford University to develop the accredited
model into an industry leading metric which allows us to demonstrate
commercial return on Cultural Power.
Senior Leadership update
Through our transformation process, the Group has identified key roles and
areas in the business which required top talent and experienced leadership for
the next stage of growth, in line with our strategy. Senior leadership
appointments in H1 include:
Jackie Stevenson joined M&C Saatchi Group in August 2025 as Global Chief
Strategy & Innovation Officer. Jackie will ensure that our M+C Saatchi
proposition, capabilities and service offering deliver on future client needs
while also Chairing our newly formed Global Growth Council which will focus on
our growth strategy across all regions.
Karen Boswell joined the Group in July 2025 as the Global CEO Digital
Experience, Performance & Consulting, unifying two specialisms while
driving integration across products, AI utilisation, technology and data
strategies.
Dani Bassil joined the Group in August 2025 as our new CEO of M+C Saatchi
AUNZ, bringing broad leadership experience as well as digital expertise. This
role is responsible for the Australia & New Zealand businesses in
Advertising, Consulting, and Passions & PR entities, incorporating Sports
& Entertainment.
The Board
As previously announced on 11 April 2025, Zillah Byng-Thorne, Non-Executive
Chair, stood down as a director of the Company with effect from the conclusion
of the Company's Annual General Meeting held on 15 May 2025.
Consequently, Dame Heather Rabbatts, previously the Senior Independent
Director (SID), assumed the role of interim Non-Executive Chair and was
appointed Non-Executive Chair on 12 June 2025, after a consultation period
with shareholders. Dame Heather has extensive experience as a board member
having held a number of executive and non-executive roles including in local
government, infrastructure, media and sports. While also currently serving as
a Senior Independent Director at Associated British Foods, she has previously
been a Non-Executive Director of Kier Group plc and Grosvenor Britain &
Ireland. She was the first woman on the Board of the Football Association in
over 150 years.
Georgina Harvey, Non-Executive Director and Chair of the Renumeration
Committee assumed the role of Senior Independent Director following Dame
Heather's appointment to Non-Executive Chair. The Board is currently
recruiting for a Non-Executive Director to join in the second half of 2025.
Louise Jackson stood down from the Board at the 2025 Annual General Meeting
(AGM), having joined in March 2020.
Capital allocation focused on organic growth
M+C Saatchi is a capital light business which, over the medium term, is
capable of converting at least 80% of its operating profits into cash, subject
to some degree of variability of the cycle. Our streamlined portfolio of
businesses, our new operating model, and our go-to-market strategy give us a
high degree of confidence in the potential for sustainable and growing free
cash generation.
· The organic growth and evolution of the Company will require
investment. Our policy is to re-invest to drive long-term growth and to add
capability, capacity and scale where we can generate the greatest return. This
lower-risk strategy ensures that we invest to drive revenue growth in priority
geographies and in higher margin capabilities where we have the right to win
· We are open to accelerate this progress through selective M&A, to
address gaps in our capabilities or regional coverage. Whilst our near-term
focus is likely to be more bolt-on type opportunities, we are comfortable
operating with a net debt to EBITDA ratio of up to 1-1.5 times which is well
within our financial covenants within the Facility
· Our overall goal is to deliver a compelling combination of a robust,
optimal balance sheet and returns to shareholders including a growing dividend
· Alongside dividends, the Board will also consider share buyback
relative to other uses of cash as a means of creating shareholder value
FINANCIAL REPORT
Income Statement
· Statutory Profit Before Tax
Statutory profit before tax was £4.3m (H1 2024: £10.8m). This decrease was
primarily driven by reduced revenue in H1 2025.
· Taxation
The effective tax rate for H1 2025 has increased to 27.1% (H1 2024: 26.9%).
· Earnings
The Like-for-like earnings decreased from £9.5million to £5.1 million, and
minority interests were further reduced in H1 to 1% (from 2% in H1 2024).
Balance sheet and cashflow
· Cash and Borrowings
Operating cash inflow before movements in working capital was £9.2 million,
which was lower than last year (£13.2 million in H1 2024), in line with the
lower profitability.
We invested £0.9 million, similar to last year, buying replacement IT
equipment and capitalised £0.6 million of software and internally developed
intangible assets. £0.5 million has been paid out to settle put options and
reduce our minority interests (with more to come in H2). We also paid what was
due on our property leases (£3.6 million), down from £4.3 million last year.
Cash net of bank borrowings (excluding restricted cash) at 30 June 2025 is
£8.7 million, compared to £11.8 million of net cash at 31 December 2024 and
£12.9 million net cash at 30 June 2024.
· Working Capital Movement
Trade and other receivables decreased by £9.3 million (7.3%) between 30 June
2024 and 30 June 2025, driven by stronger cash collection and lower levels of
billing in line with decreased revenue. Trade and other payables decreased by
£21.6 million (15.5%) between 30 June 2024 and 30 June 2025, driven by lower
cost accruals.
Net working capital decreased by £3.0 million since the beginning of the
year.
Notes
Company
M&C Saatchi plc, a company incorporated and domiciled in England and Wales
with company number 05114893, listed on the AIM Market of the London Stock
Exchange plc.
Group
The Company and its subsidiaries.
Like-for-like results
A self-defined alternative measure of profit that provides a different
perspective to the Statutory results. The Directors believe it provides a
better view of the underlying performance of the Company, because it excludes
a number of items that are not part of routine business income and expenses.
These Like-for-like figures are a better way to measure and manage the
business and are used for internal performance management and reward.
"Like-for-like results" is not a defined term in IFRS.
Like-for-like results represent the underlying trading profitability of the
Group and excludes:
• Separately disclosed items that are one-off in nature and are not part of
running the business.
• Impairment of non-current assets.
• Amortisation of acquired intangibles.
• Gains or losses generated by disposals of subsidiaries and associates.
• Fair value adjustments to unlisted equity investments, acquisition related
contingent consideration, investment properties and put options.
• Dividends paid to IFRS 2 put option holders.
• Results of subsidiaries which management had or intends to exit in the
current and prior year.
• Foreign exchange movements by restating prior year figures using current
year foreign exchange rates.
A reconciliation of Statutory to Like-for-like results is presented in Note 4.
Foreign Exchange
The Group is exposed to movements in foreign currency exchange rates in
respect of the translation of net assets and income statements of foreign
operations. The like-for-like basis applies the constant foreign exchange
applicable for the current period to comparative period in order to present
the reported results on a more comparable basis.
Key currencies and average FX rates taken for the period measured (January
2025 to June 2025) to restate H1 2024
Currency Jun-25 Dec-24 Sterling
Stronger/(weaker)
United Arab Emirates Dirham AED 4.77 4.60 3.7%
Australian $ AUD 2.05 2.02 1.5%
Euro € EUR 1.19 1.21 (1.7%)
US $ USD 1.30 1.25 4.0%
South African Rand ZAR 23.87 23.57 1.3%
Operating profit margin
Operating profit margin refers to the percentage calculated through dividing
operating profit by net revenue.
Net cash
Net cash refers to cash and cash equivalents, less borrowings of the Group,
derived from the accounts in the balance sheet, excluding lease liabilities.
Net revenue
Net revenue is equal to revenue less project cost / direct cost. It is not an
IFRS defined term. It is, however, used as a key performance indicator by the
Group.
Revenue
Revenue comprises the total of all gross amounts billed, or billable, to
clients in respect of commission-based, fee-based and any other income where
we act as principal and our share of income where we act as an agent. The
difference between Billings and Revenue is represented by costs incurred on
behalf of clients with whom we operate as an agent, and timing differences
where invoicing occurs in advance or in arrears of the related revenue being
recognised.
EBITDA
EBITDA is earnings before depreciation, amortisation, finance expense and
taxation, and excludes any charges relating to IFRS 16. It is not an IFRS
defined term. It is, however, used as a key performance indicator by the
Group.
Billings
Billings comprise all gross amounts billed, or billable to clients in respect
of commission-based and fee-based income, whether acting as agent or
principal, together with the total of other fees earned, in addition to those
instances where the Group has made payments on behalf of customers to third
parties. It is stated exclusive of VAT and sales taxes.
Minority interests and non-controlling interests
Within the Group, there are a number of subsidiary companies and partnerships
in which employees hold a direct interest in the equity of those companies.
These employees are referred to as minority shareholders. Of these subsidiary
companies and partnerships, most account for the shareholding of their
minority shareholders as a management incentive (through the award of
conditional shares) and are 100% consolidated in the Group's financial
statements. The remaining four subsidiary companies (including one without a
put option) account for their minority shareholders as non-controlling
interests, a defined IFRS term, with their share of the Group's profits being
shown separately on the Income Statement.
Unaudited Consolidated Income Statement Six months ended 30 June 2025 Six months ended 30 June 2024 Year ended 31 December 2024
Note £000 £000 £000
Billings 202,287 243,982 610,084
Revenue 173,405 199,529 395,418
Project cost / direct cost (69,566) (87,114) (164,008)
Net revenue 103,839 112,415 231,410
Staff costs (75,842) (81,083) (163,791)
Depreciation (3,241) (3,431) (6,535)
Amortisation (332) (358) (600)
Impairment reversal / (charges) - 720 (890)
Other operating charges (16,971) (14,428) (32,864)
Other gains / (losses) - 339 (3,813)
Loss allowance - (192) (192)
Loss on disposal of subsidiaries - (315) (230)
Operating profit 7,453 13,667 22,495
Share of results of associates and joint ventures 21 (26) -
Other non-operating income 7 27 60
Finance income 200 204 878
Finance costs (3,389) (3,060) (5,302)
Profit before taxation 4,292 10,812 18,131
Taxation (1,165) (2,905) (6,394)
Profit for the period from continuing operations 3,127 7,907 11,737
Profit for the period from discontinued operations, net of tax - 220 3,068
Total profit for the year 3,127 8,127 14,805
Total profit from continuing operations 3,127 7,907 11,737
Attributable to:
Equity shareholders of the Group 3,150 7,921 11,717
Non-controlling interests (23) (14) 20
Profit for the period 3,127 7,907 11,737
Earnings per share
Basic (pence) 5 2.61 6.49 9.63
Diluted (pence) 5 2.58 6.24 9.42
Total profit from discontinued operations - 220 3,068
Attributable to: -
Equity shareholders of the Group - 192 3,011
Non-controlling interests - 28 57
Profit for the period - 220 3,068
Earnings per share
Basic (pence) 5 - 0.16 2.48
Diluted (pence) 5 - 0.15 2.42
Total profit for the period 3,127 8,127 14,805
Attributable to:
Equity shareholders of the Group 3,150 8,113 14,728
Non-controlling interests (23) 14 77
Profit/(loss) for the period 3,127 8,127 14,805
Earnings per share
Basic (pence) 5 2.61 6.65 12.11
Diluted (pence) 5 2.58 6.39 11.84
Like-for-like results
Net revenue 103,804 109,408 225,917
Operating profit 4 10,337 16,082 34,373
Profit before tax 4 6,944 13,272 29,787
Profit after tax attributable to equity shareholders of the Group 4 5,078 9,529 20,974
EBITDA 13,781 19,622 41,389
Six months ended 30 June 2025 Six months ended Year ended
30 June 2024 31 December 2024
£000 £000 £000
Profit for the period 3,127 8,127 14,805
Other comprehensive income/(loss)
Exchange differences on translating foreign operations before tax (63) 146 527
Historic translation reserve on disposal of subsidiaries - - (1,464)
Other comprehensive income/(loss) for the period net of tax (63) 146 (937)
Total comprehensive income for the period 3,064 8,273 13,868
Total comprehensive income attributable to:
Equity shareholders of the Group 3,087 8,259 13,790
Non-controlling interests (23) 14 77
Total comprehensive income for the period 3,064 8,273 13,867
Unaudited Consolidated Comprehensive Income Statement
Six months ended Six months ended Year ended
30 June 2025 30 June 2024 31 December 2024
£000 £000 £000
Non-current assets
Intangible assets 31,868 34,128 32,318
Investments in associates and JVs 157 113 138
Plant and equipment 5,706 6,887 6,002
Right-of-use assets 24,623 30,219 25,544
Investment properties 1,244 2,134 1,244
Other non-current assets 5,247 3,503 5,282
Deferred tax assets 3,979 6,015 4,840
Financial assets at fair value through profit or loss 668 7,215 668
Deferred and contingent consideration - 253 -
73,492 90,467 76,036
Current assets
Trade and other receivables 118,243 127,517 126,298
Current tax assets 4,819 3,969 1,390
Restricted cash 2,517 - 3,462
Cash and cash equivalents 24,201 31,915 25,855
149,780 163,401 157,005
Assets held for sale - - 2,717
149,780 163,401 159,722
Current liabilities
Trade and other payables (117,871) (139,477) (131,536)
Provisions (33) (32) (90)
Current tax liabilities (3,599) (2,662) (1,626)
Borrowings (28) (199) (43)
Lease liabilities (4,953) (5,759) (5,014)
Minority shareholder put option liabilities (3,482) (4,412) (525)
(129,966) (152,541) (138,834)
Net current assets 19,814 10,860 20,888
Total assets less current liabilities 93,306 101,327 96,924
Non-current liabilities
Deferred tax liabilities (909) (920) (1,032)
Borrowings (14,874) (18,797) (13,399)
Lease liabilities (35,835) (41,024) (37,230)
Minority shareholder put option liabilities - (3,482) (3,132)
Other non-current liabilities (2,159) (1,988) (2,020)
(53,777) (66,211) (56,813)
Total net assets 39,529 35,116 40,111
Equity
Share capital 1,227 1,227 1,227
Share premium 50,327 50,327 50,327
Merger reserve 37,554 37,554 37,554
Treasury reserve (3,505) (1,666) (2,698)
Minority interests put option reserve (1,175) (2,175) (1,175)
Non-controlling interests acquired (34,428) (33,119) (34,428)
Hedging reserve - 201 -
Foreign exchange reserve 1,351 2,497 1,414
Accumulated loss (11,887) (20,228) (12,198)
Equity attributable to shareholders of the Group 39,464 34,618 40,023
Non-controlling interests 65 498 88
Total equity 39,529 35,116 40,111
Unaudited Consolidated Balance Sheet
Share capital Share premium Merger reserve Treasury reserve MI put option reserve Non-controlling interests acquired Foreign exchange reserves Retained earnings/ (accumulated losses) Subtotal Non-controlling interests in equity Total
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
At 31 December 2024 1,227 50,327 37,554 (2,698) (1,175) (34,428) 1,414 (12,198) 40,023 88 40,111
Share option charge - - - - - - - (485) (485) - (485)
Purchase of own shares - - - (807) - - - - (807) - (807)
Dividends - - - - - - - (2,354) (2,354) - (2,354)
Total transactions with owners - - - (807) - - - (2,839) (3,646) - (3,646)
Total profit for the period - - - - - - 3,150 3,150 (23) 3,127
Total other comprehensive loss for the period - - - - - (63) - (63) - (63)
At 30 June 2025 1,227 50,327 37,554 (3,505) (1,175) (34,428) 1,351 (11,887) 39,464 65 39,529
Unaudited Consolidated Statement of Changes in Equity
Share capital Share premium Merger reserve Treasury reserve MI put option reserve Non-controlling interests acquired Foreign exchange reserves Retained earnings/ (accumulated losses) Subtotal Non-controlling interests in equity Total
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
At 31 December 2023 1,227 50,327 37,554 (550) (2,506) (33,168) 2,351 (26,232) 29,003 533 29,536
Share option charge - - - - - - - 1,030 1,030 - 1,030
Share option exercise - - - 342 - - - (342) - - -
Tax on share options - - - - - - - 35 35 - 35
Exercise of put options - - - - 1,000 (1,000) - - - - -
Purchase of own shares - - - (2,490) - - - - (2,490) - (2,490)
Disposal of subsidiaries - - - - 331 (260) - 209 280 (522) (242)
Revaluations - - - - - - - 415 415 - 415
Tax on revaluations - - - - - - - (93) (93) - (93)
Dividends - - - - - - - (1,948) (1,948) - (1,948)
Total transactions with owners - - - (2,148) 1,331 (1,260) - (694) (2,771) (522) (3,293)
Total profit for the year - - - - - - - 14,728 14,728 77 14,805
Historic translation reserve on disposal of subsidiaries - - - - - - (1,464) - (1,464) - (1,464)
Total other comprehensive income for the period - - - - - - 527 - 527 - 527
At 31 December 2024 1,227 50,327 37,554 (2,698) (1,175) (34,428) 1,414 (12,198) 40,023 88 40,111
Unaudited Consolidated Cashflow Statement and Analysis of Net Cash
Six months ended 30 June 2025 Six months ended 30 June 2024 Year ended
31 December 2024
£000 £000 £000
Operating profit from continuing operations 7,453 13,667 22,495
Operating profit from discontinued operations - 480 3,526
Total operating profit 7,453 14,147 26,021
Adjustments for:
Depreciation of plant and equipment 1,038 1,143 2,107
Depreciation of right-of-use assets 2,203 2,664 4,995
Impairment (reversal) of right-of-use assets - (633) (297)
Loss on sale of plant and equipment - (2) -
Impairment reversal of assets held for sale - (86) (86)
Revaluation of investment properties - (361) (361)
Revaluation of financial assets at FVTPL - 22 4,277
Revaluation of contingent consideration - - (464)
Amortisation and impairment of acquired intangible assets 157 176 336
Impairment of goodwill and other intangibles - - 1,634
Impairment and amortisation of capitalised software intangible assets 175 190 278
Exercise of IFRS 2 put options (488) (3,004) (5,780)
Purchase of shares (EBT) (807) (1,116) (2,490)
Gain on disposal of discontinued operation - - (2,084)
Equity settled share-based payment expenses (485) 104 1,195
Operating cash before movements in working capital 9,246 13,244 29,281
Decrease/(Increase) in trade and other receivables 9,845 (1,700) (5,589)
(Decrease)/Increase in trade and other payables (12,749) 3,982 2,961
Transfer to restricted cash - - (3,462)
Decrease in provisions (57) (1,018) (960)
Cash generated from operations 6,285 14,508 22,231
Tax paid (1,974) (710) (3,019)
Net cash generated from operating activities 4,311 13,798 19,212
Investing activities
Disposal of subsidiary (net of cost disposed of) 2,220 (81) 1,926
Disposal of associate (net of cost disposed of) - 856 856
Acquisition of subsidiary (net of cash acquired) (717) - -
Investment loans - 148 148
Proceeds from sale of unlisted investments - 638 642
Proceeds from sale of plant and equipment 22 - 31
Proceeds from sale of software intangibles - - 52
Purchase of plant and equipment (853) (942) (1,718)
Intangible assets under construction (568) - -
Purchase of capitalised software (38) (89) (1,214)
Interest received 200 278 106
Net cash generated from investing activities 266 808 829
Net cash generated from operating and investing activities 4,577 14,606 20,041
Six months ended Six months ended Year ended
30 June 2025 30 June 2024 31 December 2024
£000 £000 £000
Financing activities
Dividends paid to equity holders of the company (2,354) (1,948) (1,948)
Cash consideration for non-controlling interests acquired and other options - (2,811) (2,811)
Payment of lease liabilities (1,991) (2,692) (5,167)
Proceeds from bank loans 1,475 2,887 -
Repayment of bank loans (15) (33) (2,000)
Borrowing costs - (795) (795)
Interest paid (1,077) (1,385) (2,140)
Interest paid on lease liabilities (1,585) (1,588) (3,351)
Net cash used in financing activities (5,547) (8,365) (18,212)
Net (decrease)/ increase in cash and cash equivalents (970) 6,241 1,829
Effect of exchange rate fluctuations on cash held (684) 1,149 (300)
Cash and cash equivalents at the beginning of the year 25,855 24,326 24,326
Total cash and cash equivalents at the end of period 24,201 31,716 25,855
Cash and cash equivalents 24,201 31,915 25,855
Bank overdrafts 7 (#_ftn7) - (199) -
Total cash and cash equivalents at the end of period 24,201 31,716 25,855
Bank loans and borrowings (15,528) (18,797) (14,043)
Net cash 8,673 12,919 11,812
Notes to the Unaudited Consolidated Interim Financial Statements
1. General information
The Company is a public limited company incorporated and domiciled in the UK.
The address of its registered office and the Company is 36 Golden Square,
London W1F 9EE.
The Company is listed on the AIM market of the London Stock Exchange.
This consolidated half-yearly financial information was approved for issue on
16 September 2025.
The comparative financial information for the year ended 31 December 2024 in
these interim financial statements does not constitute statutory accounts for
that year.
The statutory accounts for the year ended 31 December 2024 have been delivered
to the Registrar of Companies. The auditors' report on those accounts was
unqualified, did not draw attention to any matters by way of emphasis, and did
not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
2. Basis of preparation
This consolidated half-yearly financial information for the six months ended
30 June 2025 has been prepared on the going concern basis, in accordance with
the AIM Rules for companies. The interim financial statements do not include
all of the information required in annual financial statements in accordance
with IFRS and should be read in conjunction with the consolidated financial
statements for the year ended 31 December 2024.
3. Use of judgements and estimates
In the course of preparing the interim financial statements, management
necessarily makes judgements and estimates that can have a significant impact
on the interim financial statements. These estimates and judgements are
continually evaluated based on historical experience and other factors,
including expectations of future events that are believed to be reasonable
under the circumstances.
Significant accounting judgements
Management has considered the following judgements, which have the most
significant effect in terms of the amounts recognised, and their presentation,
in the interim financial statements. These are the same accounting estimates
and judgements the Group has applied in its financial statements for the year
ended 31 December 2024:
· Non-controlling interests put option accounting - IFRS 2 or IFRS 9
The key judgement is whether the awards are given beneficially as a result of
employment, which can be determined where there is an explicit service
condition, where the award is given to an existing employee, where the
employee is being paid below market value or where there are other indicators
that the award is a reward for employment. In such cases, the awards are
accounted for as a share-based payment in exchange for employment services
under IFRS 2.
Otherwise, where the holder held shares prior to the Group acquiring the
subsidiary, or gained the equity to start a subsidiary using their unique
skills, and there are no indicators it should be accounted for under IFRS 2,
then the award is accounted for under IFRS 9.
· Impairment - assessment of CGUs and assessment of indicators of
impairment
Impairment reviews are undertaken annually, or more frequently if events or
changes in circumstances indicate a potential impairment. Assets with finite
lives are reviewed for indicators of impairment (an impairment "trigger") and
judgement is applied in determining whether such a trigger has occurred.
External and internal factors are monitored by management, including a)
adverse changes in the economic or political situation of the geographic
locale in which the underlying entity operates, b) heightened risk of client
loss or chance of client gain, and c) internal reporting suggesting that an
entity's future economic performance is better or worse than previously
expected. Where management have concluded that such an indication of
impairment exists, then the recoverable amount of the asset is assessed.
For the interim financial statements, management have acknowledged the
challenging market conditions in the UK and Australia. These were factored
into a number of agency budgets and, as such, it was concluded that there were
no new impairment indicators at the half year.
Significant estimates and assumptions
The areas of the Group's interim financial statements subject to key
assumptions and other significant sources of estimation uncertainty at the
reporting date that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities are described below. The
Group has based its assumptions and estimates on information available when
the interim financial statements were prepared.
· Deferred tax assets
The Group assesses the future availability of carried forward losses and other
tax attributes by reference to jurisdiction-specific rules around carry
forward and utilisation and it assesses whether it is probable that future
taxable profits will be available against which the attribute can be utilised.
· Fair value measurement of financial instruments
The Group holds certain financial instruments which are recorded on the
balance sheet at fair value at the point of recognition and remeasured at the
end of each reporting period. At the period end these relate to:
(i) equity investments at FVTPL in non-listed limited companies; and
(ii) certain contingent consideration.
No formal market exists to trade these financial instruments and, therefore,
their fair value is measured by the most appropriate valuation techniques
available, which vary based on the nature of the instruments. The inputs to
the valuation models are taken from observable markets where possible, but
where this is not feasible, judgement is required to establish fair values.
· Share-based incentive arrangements
Share-based incentives are valued at the date of the grant, using stochastic
Monte Carlo pricing models with non-market vesting conditions. Typically, the
value of these awards is directly related to the performance of a particular
entity of the Group in which the employee holds a minority interest. The key
inputs to the pricing model are risk-free interest rates, share price
volatility and expected future performance of the entity to which the award
relates. Management apply judgement to these inputs, using various sources of
information, including the Company's share price, experience of past
performance and published data on risk-free interest rates (government gilts).
· Leasing estimates
Anticipated length of lease term - IFRS 16 defines the lease term as the
non-cancellable period of a lease, together with the options to extend or
terminate a lease, if the lessee is reasonably certain to exercise that
option. Where a lease includes the option for the Group to extend the lease
term, the Group takes a view, at inception, as to whether it is reasonably
certain that the option will be exercised. This will take into account the
length of time remaining before the option is exercisable, current trading,
future trading forecasts and the level and type of any planned capital
investment. The assessment of whether the option will be exercised is
reassessed in each reporting period. A reassessment of the remaining life of
the lease could result in a recalculation of the lease liability and a
material adjustment to the associated balances.
4. Like-for-like results
Like-for-like results - Six Months Ended 30 June 2025
Statutory results Separately disclosed items Exiting agencies Dividends paid to IFRS 2 put holders Put option accounting Like-for-like results
Amortisation of acquired intangibles
Six months ended 30 June 2025 £000 £000 £000 £000 £000 £000 £000
Revenue 173,405 - - - - - 173,405
Net revenue 103,839 - (35) - - - 103,804
Staff costs (75,842) 2,310 53 - 93 (155) (73,541)
Depreciation (3,241) - - - - - (3,241)
Amortisation (332) - - 157 - - (175)
Impairments - - - - - - -
Other operating charges (16,971) 339 122 - - - (16,510)
Other gains - - - - - - -
Loss allowance - - - - - - -
Gain on disposal of subsidiaries - - - - - - -
Operating profit 7,453 2,649 140 157 93 (155) 10,337
Share of results of associates and JV 21 - - - - - 21
Other non-operating income 7 - - - - - 7
Finance income 200 - (6) - - - 194
Finance expense (3,389) - 23 - - (249) (3,615)
Profit before taxation 4,292 2,649 157 157 93 (404) 6,944
Taxation (1,165) (686) - (50) - - (1,901)
Profit for the year 3,127 1,963 157 107 93 (404) 5,043
Non-controlling interests (23) - - - (12) - (35)
Profit attributable to equity holders of the Group 3,150 1,963 157 107 105 (404) 5,078
Like-for-like results - Six Months Ended 30 June 2024
Statutory results Separately disclosed items Exiting agencies Impairment of non-current assets Impairment of non-current assets Revaluation of investment properties Dividends paid to IFRS 2 put holders Put option accounting Constant currency adjustment Like-for-like results
Amortisation of acquired intangibles Gain/loss on disposal of subsidiaries FVTPL investments under IFRS 9
Six months ended 30 June 2024 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Revenue 199,529 - (2,045) - - - - - - - - (461) 197,023
Net revenue 112,415 - (336) - - - - - - - - (2,671) 109,408
Staff costs (81,083) 1,825 324 - - - - - - 694 648 1,949 (75,643)
Depreciation (3,431) - 2 - - - - - - - - 82 (3,347)
Amortisation (358) - - 178 - - - - - - - 1 (179)
Impairment charges 720 - - - (87) (633) - - - - - - -
Other operating charges (14,428) 715 (560) - - - - 4 - - - 121 (14,148)
Other gains/(losses) 339 - - - - - - 42 (381) - - - -
Loss allowance (192) - 191 - - - - - - - - (8) (9)
Gain/(loss) on disposal of subsidiaries (315) - - - - - 315 - - - - - -
Operating profit 13,667 2,540 (379) 178 (87) (633) 315 46 (381) 694 648 (526) 16,082
Share of results of associates (26) - 26 - - - - - - - - - -
Gain/(loss) on disposal of subsidiaries 27 - (13) - - - - - - - - - 14
Finance income 204 - (5) - - - - - - - - (20) 179
Finance expense (3,060) - 17 - - - - - - - (16) 56 (3,003)
Profit before taxation 10,812 2,540 (354) 178 (87) (633) 315 46 (381) 694 632 (490) 13,272
Taxation (2,905) (655) (21) (58) - - - - - - - 129 (3,510)
Profit/(Loss) for the year 7,907 1,885 (375) 120 (87) (633) 315 46 (381) 694 632 (361) 9,762
Non-controlling interests (14) - (90) - - - - - - 678 - (341) 233
Profit attributable to equity holders of the Group 7,921 1,885 (285) 120 (87) (633) 315 46 (381) 16 632 (20) 9,529
Like-for-like results - Year Ended 31 December 2024
Statutory results Separately disclosed items Exiting agencies Gain/loss on disposal of subsidiaries Impairment of assets held for sale Impairment of goodwill Impairment of non-current assets Dividends paid to IFRS 2 put holders Put option accounting Constant currency adjustment Like-for-like results
Amortisation of acquired intangibles FVTPL investments under IFRS 9
Year ended 31 December 2024 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Revenue 395,418 - (2,869) - - - - - - - - (9,435) 383,114
Net revenue 231,410 - (405) - - - - - - - - (5,088) 225,917
Staff costs (163,791) 5,776 444 - - - - - - 866 (712) 3,606 (153,811)
Depreciation (6,535) - 2 - - - - - - - - 152 (6,381)
Amortisation (600) - - - - 335 - - - - - (310) (575)
Impairments (890) - - - (86) - 1,634 (658) - - - - -
Other operating charges (32,864) 1,472 (237) - - - - - - - - 959 (30,670)
Other losses (3,813) - - - - - - - 3,813 - - - -
Loss allowance (192) - 201 - - - - - - - - (116) (107)
Gain on disposal of subsidiaries (230) - - 230 - - - - - - - - -
Operating profit 22,495 7,248 5 230 (86) 335 1,634 (658) 3,813 866 (712) (797) 34,373
Share of results of associates and JV - - - - - - - - - - - - -
Other income 60 - (15) - - - - - - - - - 45
Finance income 878 - (6) - - - - - (872) - - -
Finance expense (5,302) - 5 - - - - - 872 - (294) 88 (4,631)
Profit before taxation 18,131 7,248 (11) 230 (86) 335 1,634 (658) 3,813 866 (1,006) (709) 29,787
Taxation (6,394) (1,824) (242) - - (107) - 219 - - - 194 (8,154)
Profit for the year 11,737 5,424 (253) 230 (86) 228 1,634 (439) 3,813 866 (1,006) (515) 21,633
Non-controlling interests 20 - - - - - - - - 685 - (46) 659
Profit attributable to equity holders of the Group 11,717 5,424 (253) 230 (86) 228 1,634 (439) 3,813 181 (1,006) (469) 20,974
5. Earnings per share
Earnings per share - Six Months Ended 30 June 2025
Basic and diluted earnings per share are calculated by dividing appropriate
earnings metrics by the weighted average number of the Company's ordinary
shares in issue during the year.
Diluted earnings per share is calculated by adjusting the weighted average
number of the Company's shares in issue on the assumption of conversion of all
potentially dilutive ordinary shares. The dilutive effect of unvested
outstanding put options is calculated based on the number that would vest had
the balance sheet date been the vesting date.
Continuing operations Discontinued operations Total Like-for-like
2025 2025 2025 2025
Six months ended 30 June 2025
Profit attributable to equity shareholders of the Group (£000) 3,150 - 3,150 5,078
Basic earnings per share
Weighted average number of shares (thousands) 120,714 - 120,714 120,714
Basic EPS 2.61p - 2.61p 4.21p
Diluted earnings per share
Weighted average number of shares (thousands) as above 120,714 - 120,714 120,714
Add
- LTIP 1,574 - 1,574 1,574
- Put options - - - -
Total 122,288 - 122,288 122,288
Diluted EPS 2.58p - 2.58p 4.15p
Excluding the put options (payable in cash) - - - -
Weighted average numbers of shares (thousands) including dilutive shares 122,288 - 122,288 122,288
Diluted EPS - excluding items the Group intends and are able to pay in cash 2.58p - 2.58p 4.15p
Earnings per share - Six Months Ended 30 June 2024
Continuing operations Discontinued operations Total Like-for-like
2024 2024 2024 2024
Six months ended 30 June 2024
Profit attributable to equity shareholders of the Group (£000) 7,921 192 8,113 9,529
Basic earnings per share
Weighted average number of shares (thousands) 122,101 122,101 122,101 122,101
Basic EPS 6.49p 0.16p 6.65p 7.80p
Diluted earnings per share
Weighted average number of shares (thousands) as above 122,101 122,101 122,101 122,101
Add
- LTIP 2,373 2,373 2,373 2,373
- Put options 2,365 2,365 2,365 2,365
Total 126,839 126,839 126,839 126,839
Diluted EPS 6.24p 0.15p 6.39p 7.51p
Excluding the put options (payable in cash) (2,365) (2,365) (2,365) (2,365)
Weighted average numbers of shares (thousands) including dilutive shares 124,474 124,474 124,474 124,474
Diluted EPS - excluding items the Group intends and are able to pay in cash 6.36p 0.15p 6.51p 7.66p
Earnings per share - Year Ended 31 December 2024
Continuing operations Discontinued operations Total Like-for-like
2024 2024 2024 2024
Year ended 31 December 2024
Profit attributable to equity shareholders of the Group (£000) 11,717 3,011 14,728 20,974
Basic earnings per share
Weighted average number of shares (thousands) 121,616 121,616 121,616 121,616
Basic EPS 9.63p 2.48p 12.11p 17.24p
Diluted earnings per share
Weighted average number of shares (thousands) as above 121,616 121,616 121,616 121,616
Add
- LTIP 2,042 2,042 2,042 2,042
- Put options 751 751 751 751
Total 124,409 124,409 124,409 124,409
Diluted EPS 9.42p 2.42p 11.84p 16.86p
Excluding the put options (payable in cash) (751) (751) (751) (751)
Weighted average numbers of shares (thousands) including dilutive shares 123,658 123,658 123,658 123,658
Diluted EPS - excluding items the Group intends and are able to pay in cash 9.48p 2.43p 11.91p 16.96p
6. Separately disclosed items
Separately disclosed items include one-off, non-recurring revenues or
expenses. These are shown separately and are excluded from Headline profit to
provide a better understanding of the underlying results of the Group.
30 June 2025
Separately disclosed items for the six months ended 30 June 2025 comprise the
following:
Staff costs Operating costs Taxation Total
£000 £000 £000 £000
Restructuring - ongoing businesses 854 - (236) 618
Restructuring - global efficiency programme 240 - (60) 180
Transformation project costs 1,216 339 (390) 1,165
Total separately disclosed items 2,310 339 (686) 1,963
The Group has been pursuing a strategy to simplify its operating structure and
improve efficiency across the Group. This programme continued into 2025:
· Local businesses within the Group have continued to review their own
future, permanent operational structures, following market changes, which has
resulted in staff redundancy costs in the period across nine ongoing
businesses across the Group. The restructuring costs are treated as separately
disclosed items only when a role has been permanently eliminated from the
business (there should be no intention for the role to be replaced
like-for-like in the next 12 months). There are £854k of redundancy costs
included within non-like-for-like restructuring for ongoing businesses, and
£224k of redundancy costs are included within the like-for-like staff costs.
· The next stage of the Group's global efficiency programme has
continued to identify and reduce specific central HQ roles, which will be
replaced overseas to save cost. The redundancy costs associated with this
restructuring programme have been treated as an exceptional non-like-for-like
cost, as they are one-off exit costs relating to compensation to employees for
periods not worked.
In the second half of 2022, the Group commenced a global efficiency programme.
The staff costs of the project team dedicated to this transformation project
(£1,216k) have been classified as separately disclosed items in line with the
treatment since 2022. The project team will continue to manage the project
through to conclusion in H2 2025. The operating cost mainly relates to
recruitment costs for roles that are being replaced overseas, service charges
and travel costs.
30 June 2024
Separately disclosed items for the six months ended 30 June 2024 comprise the
following:
Staff costs Operating costs Taxation Total
£000 £000 £000 £000
Restructuring - ongoing businesses 1,200 10 (317) 893
Restructuring - global efficiency programme 248 252 (123) 377
CEO compensation (158) - 40 (118)
Transformation project costs 535 453 (255) 733
Total separately disclosed items 1,825 715 (655) 1,885
As part of the restructuring programme in H1 2024:
· Staff redundancy costs in the period across 7 ongoing businesses
across the Group. There were £1,200k of redundancy costs included within
non-like-for-like restructuring for ongoing businesses, and £174k of
redundancy costs are included within the Like-for-like staff costs.
The CEO compensation credit relates to the over accrual of 3 months of staff
costs in 2023 relating to the gardening leave of the former CEO, which has not
been worked. This was treated as an exceptional non-Like-for-like cost in
2023, as these costs are legally committed by the business, but with no
benefit to the business. Therefore, the reversal of the over accrual has also
been treated as an exceptional item in 2024.
31 December 2024
Separately disclosed items for the year ended 31 December 2024 comprise the
following:
Staff costs Operating costs Taxation Total
£000 £000 £000 £000
Restructuring - discontinued businesses 58 - (17) 41
Restructuring - ongoing businesses 3,403 62 (841) 2,624
Restructuring - global efficiency programme 983 571 (295) 1,259
CEO/Executive Chair compensation (158) - 40 (118)
People costs - additional headcount 767 - (192) 575
Transformation project costs 723 839 (519) 1,043
Total separately disclosed items 5,776 1,472 (1,824) 5,424
As part of the restructuring programme in FY2024:
· There were £3,403k of redundancy costs included within
non-like-for-like restructuring for ongoing businesses, and £430k of
redundancy costs included within the like-for-like staff costs.
7. Segmental information
The Group's operating segments are aligned to those business units that are
regularly evaluated by the chief operating decision maker ("CODM"), namely the
Board, in making strategic decisions, assessing performance and allocating
resources.
We primarily assess the Group's performance by division, namely Advertising,
Non-advertising Specialisms and Group Central Costs. The segmental information
is reconciled to the Like-for-like results in Note 4.
Segmental Information by Division 8 (#_ftn8)
Advertising Non-advertising Specialisms Group Central Costs LFL Total
Six Months Ended 30 June 2025 £000 £000 £000 £000
Net revenue 33,921 69,883 - 103,804
Operating profit/(loss) 1,701 11,825 (3,189) 10,337
Operating profit margin 5% 17% - 10%
Profit/(loss) before tax 1,450 10,200 (4,367) 6,944
Advertising Non-adverting Specialisms Group Central Costs LFL Total
Six Months Ended 30 June 2024 £000 £000 £000 £000
Net revenue 37,496 71,912 - 109,408
Operating profit/(loss) 4,065 16,395 (4,378) 16,082
Operating profit margin 11% 23% - 15%
Profit/(loss) before tax 3,813 17,094 (7,635) 13,272
Advertising Non-advertising Specialisms Group Central Costs LFL Total
Year Ended 31 December 2024 £000 £000 £000 £000
Net revenue 74,984 150,933 - 225,917
Operating profit/(loss) 8,335 38,880 (12,842) 34,373
Operating profit margin 11% 26% - 15%
Profit/(loss) before tax 7,860 40,184 (18,257) 29,787
Segmental Information by Geography
UK Europe Middle East Asia Pacific (APAC) Americas Group Central Costs LFL Total
Six Months Ended 30 June 2025 £000 £000 £000 £000 £000 £000 £000
Net revenue 50,404 6,063 6,472 20,170 20,695 - 103,804
Operating profit/(loss) 7,509 1,367 1,041 1,870 1,739 (3,189) 10,337
Operating profit margin 15% 23% 16% 9% 8% - 10%
Profit/(loss) before tax 6,063 1,335 990 1,268 1,655 (4,367) 6,944
UK Europe Middle East APAC Americas Group Central Costs LFL Total
Six Months Ended 30 June 2024 £000 £000 £000 £000 £000 £000 £000
Net revenue 51,960 5,736 4,414 25,972 21,326 - 109,408
Operating profit/(loss) 12,586 1,145 715 3,684 2,330 (4,378) 16,082
Operating profit margin 24% 20% 16% 14% 11% - 15%
Profit/(loss) before tax 13,525 1,150 687 3,198 2,347 (7,635) 13,272
UK Europe Middle East Asia Pacific (APAC) Americas Group Central Costs LFL Total
Year Ended 31 December 2024 £000 £000 £000 £000 £000 £000 £000
Net revenue 108,117 12,174 11,273 51,591 42,762 - 225,917
Operating profit/(loss) 27,696 2,175 2,188 9,154 6,002 (12,842) 34,373
Operating profit margin 26% 18% 19% 18% 14% - 15%
Profit/(loss) before tax 29,777 2,170 2,132 8,292 5,673 (18,257) 29,787
8. Net finance income / (expense)
Six months ended 30 June 2025 Six months ended 30 June 2024 Year ended
31 December 2024
£000 £000 £000
Bank interest receivable 108 75 70
Other interest receivable 8 129 772
Sublease finance income 84 - 36
Finance income 200 204 878
Bank interest payable (1,077) (1,384) (1,973)
Amortisation of loan costs (136) (133) (268)
Other interest payable* (840) (68) (156)
Interest on lease liabilities (1,585) (1,475) (3,199)
Valuation adjustment to IFRS 9 put option liabilities 249 - 294
Finance expense (3,389) (3,060) (5,302)
Net finance expense (3,189) (2,856) (4,424)
* Other interest payable includes exchange differences on financing activities
9. Taxation
Income tax expenses are recognised based on management's estimate of the
average annual income tax rate expected for the full financial year.
The estimated effective Like-for-like annual tax rate used for H1 2025 is
25.9% (H1 2024: 26.4%; Full Year 2024: 27.4%).
10. Dividends
The Board declared a final dividend of 1.95 pence per ordinary share for the
financial year ended 31 December 2024 (1.6 pence in 2023), which was paid in
May 2025.
11. Acquisitions
On 13 June 2025, M&C Saatchi Group acquired 90% of Dune FZ, a Dubai-based
sport marketing agency, for an initial consideration of £778,210.
The acquisition is accounted for in accordance with IFRS 3, 'Business
Combinations'. The initial net consideration paid was £717,358, net of cash
acquired. The group has the unilateral power to direct relevant activities of
the investee.
The group also has a Put Option agreement to purchase the remaining 10% of
Dune FZ share capital after five years, based on the continued employment of
the sellers and future EBIT performance.
The acquired balance sheet included net assets of £110,709. Goodwill of
£665,931, has been recognised. Dune FZ's media buying revenue is recognised
on an agency basis. Acquisition related costs have been expensed through the
Income Statement.
Impact on Group Accounts
The consolidated balance sheet as at 30 June 2025 includes the following
impacts from the acquisition:
£000
Tangible Fixed Assets 45
Intangible Fixed Assets 666
Non-Current Assets 711
Cash (717)
Trade Debtors 223
Other Assets 62
Current Assets (432)
Total Assets 279
Trade Creditors (69)
Other Liabilities (210)
Current Liabilities (279)
Given the recency of the transaction, there is no requirement for any
impairment analysis on the Goodwill at the half year date and no indicators of
impairment given current trading performance. No formal assessment has been
carried out to identify if there are other separately identifiable intangible
assets acquired, however this will take place before the year end.
12. Events after the balance sheet date
The Directors are not aware of any other events since 30 June 2025 that have
had, or may have, a significant impact on the Group's operations, the results
of those operations, or the state of affairs of the Group in future years.
1 (#_ftnref1) Excludes items related to bonus
(( 2 (#_ftnref2) )) Business wins include new business and project extensions
3 (#_ftnref3) Other adjustments include separately disclosed items;
amortisation of acquired intangibles; impairment of non-current assets;
revaluation of investment properties; dividends paid to IFRS 2 put holders and
put option accounting.
4 (#_ftnref4) Passions includes the PR business (moved from Advertising)
as of 2024
(( 5 (#_ftnref5) )) 62% of the decline can be attributed to Australia
(( 6 (#_ftnref6) )) 83% of the decline can be attributed to Australia
7 (#_ftnref7) These overdrafts are legally offset against balances held in
the UK; however, they have not been netted off in accordance with the
requirements of IAS32.42.
8 (#_ftnref8) The segmental reporting reflects Like-for-like results
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