Solid revenue growth, a 27 basis point increase in the operating margin to 9.5 per cent, and a clutch of important client wins sum up half-year results for advertising agency M&C Saatchi (SAA). Key to this financial performance was the ongoing strength of demand for mobile and customer relationship management (CRM) services, according to chief executive David Kershaw.
On a regional basis, the Americas division appeared to put previous concerns behind it, notching up a 19 per cent increase in revenue and an impressive jump in the operating margin from 7.7 to 17.3 per cent, thanks to new business from JW Marriott and Comcast at New York associate agency SS+K.
Other client accounts won in the period included Royal Mail in the UK, Eon in Scandinavia and Malaysian Airlines, with a challenging brief to rebrand the carrier following last year's missing airplane disaster. M&C's South African office also landed Nando's Chicken as a client in the period, which should help to boost the slim profit margins of the Middle East and Africa region by the end of 2015.
Mr Kershaw says net cash - currently £1.6m - should be above £5m come the full-year results, when broker Numis Securities is expecting M&C to report pre-tax profit of £20m and EPS of 18p (up from £17.2m and 15.2p last year).
M&C SAATCHI (SAA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 334p | MARKET VALUE: | £240m | |
| TOUCH: | 330-334p | 12-MONTH HIGH: | 395p | LOW: 260p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | na | |
| NET ASSET VALUE: | 53p* | NET CASH: | £1.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 82.6 | 13.4 | 15.76 | 1.4 |
| 2015 | 87.6 | 8.4 | 7.36 | 1.6 |
| % change | +6 | -37 | -53 | +15 |
Ex-div: 29 Oct Payment: 13 Nov *Includes intangible assets of £28.4m, or 39p a share | ||||
