M&C Saatchi boss: 'PR business showing good growth' despite group's share price collapse

M&C Saatchi boss David Kershaw expects the group's PR businesses to expand, despite the group's shares losing more than half their value as an accounting probe continues.

M&C Saatchi boss: 'PR business showing good growth' despite group's share price collapse

M&C Saatchi’s interim results, released this morning, revealed the group’s net revenue was down year-on-year by 4.1 percent to £117.9m.

Interim dividends were maintained at £2.45 despite the group’s share price falling from a high of £6.80 last year, to £1.26 announced today.

Kershaw had praise for the company’s staff, but admitted senior management had been spending a lot of time working on the accounting review announced last month.

The group took a £6.4m hit to its financial performance following an internal accounting review of several of the company’s UK subsidiaries, which found "instances of misapplication of accounting policies".

He said: "It will be nice to get the review out of the way and focus on growing the business again".

The independent review by PwC is expected to be completed in November.

"No-one involved with the misapplication is at the company anymore, and there is no evidence similar policies were found outside the UK," Kershaw added.

In addition, M&C Saatchi had net cash of £9.5m after it enjoyed a windfall from selling its remaining 24.9 per cent stake in Walker Media.

Kershaw pointed to the global growth of the group’s PR agencies, which he predicted would help drive a return to double-digit growth in 2020, and described M&C Saatchi Sports and Entertainment as "booming".

"We’re pleased with the PR side, which is showing good business growth," he said. "The numbers are good and reliable and I think we’ll continue to see growth in the UK."

Bed retailer Dreams appointed the PR business last month.

"Sport and Entertainment is doing very well with some big new business wins like Heineken, and we’re growing the business across Los Angeles and New York."

Kershaw also pointed to the expansion of M&C Saatchi Public Relations into the Middle East and Asia with an office in the UAE, Mexico and Hong Kong, while Talk.Global’s growth had come from a move into other sectors.

"It was purely fashion and beauty, but we’re seeing growth come from outside those sectors with wins like Flora, eBay and Vodafone. They were just too dependent and wanted a wider spread."

He added: "Looking to the second half, our pipeline of new business is strong across the network, and our newest businesses are performing well and expected to start making a meaningful contribution to the Group."

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