New clients and double-digit profit increase in the UK helped media agency M&C Saatchi (SAA) grow quickly last year. Selling its three-quarter stake in Walker Media for £36m in November financed a £21m share buy-back programme, too.
Assuming Walker was owned for the whole year, sales grew 5 per cent, and operating profit before a £15.5m non-cash financial charge linked to minority put options rose 8 per cent to £18.5m. Saatchi's customer relationship management (CRM) business - which gathers data on users, allowing personalised marketing - and mobile tools were behind the UK's strong performance. And deals with Land Rover, O2 and coffee maker Douwe Egberts easily offset the loss of the Dixons' account in January.
However, performance elsewhere was less stellar. The costly opening of a Stockholm office slashed profit in Europe by 18 per cent, and currency headwinds cut sales in both Asia and Australia by a tenth. Overseas operations, however, may improve, as M&C rolls out PR, mobile and CRM worldwide this year. M&C also plans to buy stakes in agencies in Brazil and elsewhere like it did in China.
Broker Numis Securities expects pre-tax profit of £17m in 2014, giving EPS of 15.5p (from £18.6m and 15.7p last year).
| M&C SAATCHI (SAA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 292p | MARKET VALUE: | £181m | |
| TOUCH: | 292-299p | 12-MONTH HIGH: | 350p | LOW: 200p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 78p* | NET CASH: | £12m** | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 103 | 10.3 | 10.2 | 3.62 |
| 2010 | 125 | 7.8 | 4.2 | 3.9 |
| 2011 | 153 | 16.0 | 15.4 | 4.5 |
| 2012 | 154 | 5.3 | -2.3 | 4.95 |
| 2013 | 162 | -2.6 | -13.0 | 5.45 |
| % change | +5 | - | - | +10 |
Ex-div: 4 Jun Payment: 4 Jul *Includes intangible assets of £35m, or 57p a share **Post £21.2m share buy-back in January | ||||
