Troubles in the advertising industry: M&C Saatchi reduces their forecasts and reduces workforce due to ongoing struggles
In a recent announcement, advertising group M&C Saatchi revealed a decline in its like-for-like operating profit and sales for the six-month period ending 30 June. The company's like-for-like net revenue for this period dropped by 5.1% to £103.8 million, compared to £109.4 million a year earlier.
The decline in performance was particularly noticeable in Australia, where revenue dropped by 26.5%. Zaid Al-Qassab, the company's chief executive, acknowledged that M&C Saatchi has not been immune to the market conditions of the wider industry.
To address cost concerns, M&C Saatchi plans to axe some central HQ roles, which will be replaced overseas. This move is expected to save the company costs and adapt to the changing global business landscape. The company has included £224,000 of redundancy costs within the like-for-like staff costs, and an additional £854,000 of redundancy costs within non-like-for-like restructuring for ongoing businesses.
The outlook for the rest of 2025 remains soft, driven by continued macro volatility and subdued market conditions in Australia and the UK. However, the company expects stronger demand in Europe, the US, and the UAE to offset these challenges.
M&C Saatchi's annual profit is expected to be broadly in line with last year, and the AIM-listed company expects its like-for-like sales to decline to mid-single digits for the year ending 31 December. Analysts had initially expected the company's operating profit to rise to £37.6 million for 2025.
The group's performance across the advertising and consulting arms of its UK arm was 'soft' in the period. As a result, M&C Saatchi's shares fell 4.18% or 7.00p to 160.50p on Thursday.
Despite these challenges, M&C Saatchi continues to identify and reduce specific central HQ roles, which will be replaced overseas, to ensure the company's long-term sustainability and adaptability in the ever-evolving global stock market.
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