Advertising firm M&C Saatchi reduces forecasts and trims workforce amidst ongoing challenges in the advertising industry.
In a recent announcement, advertising group M&C Saatchi has revealed that it expects its like-for-like sales to fall this year. The company's performance has been affected by the uncertain macro-economic environment and geo-political tensions, with clients reacting cautiously.
The group's performance in the six-month period ending 30 June has shown a decline. Like-for-like net revenue came in at £103.8million, down 5.1% from £109.4million a year earlier. Similarly, the like-for-like operating profit fell 36% to £10.3million.
The company's performance in Australia was a significant drag on its overall performance, with revenue down 26.5% in the period. The UK arm's advertising and consulting divisions also experienced 'soft' performance in the period.
To cut costs, M&C Saatchi has identified and reduced specific central HQ roles. These roles will be replaced overseas, with the new jobs being established in various countries including the UK, US, Singapore, and Australia. The foreign employees taking over these positions have not been specifically named yet.
The company has included £224,000 of redundancy costs within the like-for-like staff costs, and £854,000 of redundancy costs within non-like-for-like restructuring for ongoing businesses.
Despite the challenges, M&C Saatchi's annual profit is expected to be broadly in line with last year. 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.
Zaid Al-Qassab, the company's chief executive, stated that the company has not been immune to the market conditions of the wider finance industry. Shares in M&C Saatchi fell 4.18% on Thursday, having fallen 17% in the last year. However, the company remains optimistic about its future prospects, particularly in regions where market conditions are more favourable.
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