M&C Saatchi trading in line, agrees sale of Swiss operation

16th May 2024 16:41

(Sharecast News) - M&C Saatchi continued positive momentum from the second half of 2023 in a trading update on Thursday, with overall performance in line with expectations.

The AIM-traded advertising company, which was holding its annual general meeting, said like-for-like net revenue growth remained in the low single digits, driven by improved performances in advertising and media and robust growth in the issues segment.

That growth was accompanied by a focus on profitability, resulting in operating margins that were significantly ahead of the prior year.

Additionally, net cash continued to increase since the end of 2023.

M&C Saatchi said the portfolio rationalisation and cost-saving measures it implemented in 2023 had considerably enhanced profitability.

The firm said it remained on track to achieve the previously-announced £10m of annualised cost savings by the end of 2024.

Structural changes to the cost base and a new operating model were expected to boost operational leverage, supporting further margin expansion and cash generation.

As part of its simplification strategy, M&C Saatchi announced the divestment of M&C Saatchi Switzerland.

The company said it would sell its entire shareholding to local director Olivier Girard for a nominal consideration.

It said the Swiss entity, which operated at break-even for the year ended 31 December 2023, had been loss-making in the current year to date.

At 1619 BST, shares in M&C Saatchi were flat at 205p.

Reporting by Josh White for Sharecast.com.