M&C Saatchi reports full-year growth 'above 10 per cent' in PR agencies

M&C Saatchi PR and M&C Saatchi Sport & Entertainment both saw like-for-like revenue grow by more than 10 per cent in 2015, with the agencies described as "star contributors" to record full-year revenue and profits for their parent company.

M&C Saatchi this morning reported a 17 per cent rise in pre-tax profit to £20.1m in 2015, on revenue up six per cent to £178.9m.

Figures for the group’s individual agencies have not been given. However, M&C Saatchi CEO David Kershaw told PRWeek like-for-like revenue at its two PR agencies – M&C Saatchi PR and M&C Saatchi Sport & Entertainment – were "well over 10 per cent".

"Both PR and Sport & Entertainment have been star contributors," Kershaw said, adding: "It was a very good first half and largely better in the second."

He said M&C Saatchi PR’s profit contribution grew by one third in 2015 on the back of new business. Kershaw highlighted account wins with Dixons Carphone, Axa and Virgin Holidays in the UK, and Swatch in the US. The agency opened two offices in the year, in Germany and Hong Kong.

Kershaw said Sport & Entertainment "also had a very good year". He added: "All the plaudits for 02 and Wear the Rose [the 2015 Rugby World Cup campaign] were particularly gratifying, and the Samsung win was significant."

Across the group as a whole, UK revenue grew six per cent, with the firm’s CRM and Mobile agencies "continuing to excel", although operating profit was flat due to restructurings cost in its ad agency unit.

Like-for-like revenue grew 27 per cent in the Americas, with operating profit there up 631 per cent to £3.3m. The firm pointed to its relationship with part-owned agency SS+K in New York – this month M&C Saatchi increased its stake in that business from 33 to 51 per cent – along with new business wins.

Like-for-like revenue growth was 19 per cent in Europe, 11 per cent in the Middle East & Africa, and five per cent in Asia and Australasia.

Kershaw said: "2015 was another year of outstanding progress for M&C Saatchi. Our proven strategy of winning new business and starting new businesses continues to deliver with the group producing record revenue and profits.

"The current strong performance across the global network positions us well for the future. We are confident we will continue to make good progress in 2016 and beyond."

David Cheetham, market analyst at broker XTB.com, said: "These latest results will come as a welcome surprise to investors, as after a challenging year for the advertising agency the 17 per cent increase in pre-tax profit demonstrates an impressive performance during 2015.

"In addition to the double-digit gain in earnings, the accompanying rise in revenue shows a solid set of results and suggests that the coming year may be far more lucrative for shareholders following the past 12 months, which has seen a decline of around 20 per cent in the stock price."

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