M&C Saatchi (SAA) is pinning its hopes on international expansion. The storied advertising agency saw its constant-currency sales rise a tenth last year as it invested in budding overseas businesses and rolled out popular services across its network. That drove operating profit up 17 per cent to £16m.
The core UK business grew sales by 9 per cent as it won a global account with Douwe Egberts and enjoyed strong demand for its mobile and customer relationship management (CRM) offerings. The group is now introducing these and other new services internationally.
Sales in Asia and Australasia suffered from the loss of a key account and the closure of the underperforming New Zealand office. On the bright side, recent joint ventures in China and India swelled group profits from associates from £0.2m to £1.4m.
M&C Saatchi also struggled to close contracts in New York, prompting a management reshuffle in the spiritual home of advertising. The group acquired a third of local creative agency SS+K for $8m, which helped it win international work with JW Marriott.
The group has begun 2015 on the attack. It's agreed to acquire a Tel Aviv ad agency to tap into Israel's sprouting technology sector, and in February it snapped up a quarter of Sao Paulo-based agency Santa Clara.
Broker Numis expects pre-tax profit of £20m in the current financial year, giving EPS of 18p (from £17.2m and 15.2p in 2014).
| M&C SAATCHI (SAA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 343p | MARKET VALUE: | £243m | |
| TOUCH: | 343-347p | 12-MONTH HIGH: | 395p | LOW: 235p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 46p* | NET CASH: | £5m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 125 | 7.8 | 4.2 | 3.90 |
| 2011 | 153 | 16.0 | 15.4 | 4.50 |
| 2012 | 154 | 5.3 | -2.3 | 4.95 |
| 2013 | 162 | -2.6 | -13.0 | 5.45 |
| 2014 | 169 | 6.2 | -0.2 | 6.27 |
| % change | +5 | - | - | +15 |
Ex-div: 11 Jun Payment: 10 Jul *Includes intangible assets of £29.1m, or 41p a share | ||||
