M&C Saatchi’s (SAA) full-year sales were buoyed by favourable translation effects, but still rose 7 per cent on a constant-currency basis. Meanwhile, adjusting for the costs of establishing new businesses, the operating margin climbed from 10.2 per cent to 11.3 per cent, and underlying pre-tax profit was up 16 per cent at £27.7m.
Revenue from the Middle East and Africa rose by over a quarter to £14.7m, while operating profit grew by 45 per cent to £1.6m. The South African team won clients including the South African Reserve Bank, and picked up Lexus and Automark – a second-hand car retailer – after the reporting period. The agency increased its regional exposure through the acquisition of a controlling stake in South Africa-based sport entertainment company Levergy.
Meanwhile, European sales were on the rise, reflecting strong trading in Germany and Italy. Revenues for the UK – M&C’s largest market – were up 6 per cent at £94m, with high-profile wins including Lipton and Clinique. However, North America endured a tougher time. Sales here dipped, while operating profit plunged 53 per cent to £44.6m due to a slowdown in advertising revenues in New York. That said, thanks to a restructuring process, the region has been profitable so far this year.
Prior to these figures, analysts at Numis were guiding for pre-tax profit of £30.5m and EPS of 25.5p for 2018, against £27.6m and 23.1p last year.
| M&C SAATCHI (SAA) | ||||
| ORD PRICE: | 425p | MARKET VALUE: | £349m | |
| TOUCH: | 408-425p | 12-MONTH HIGH: | 425p | LOW: 290p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 124 | |
| NET ASSET VALUE: | 70p* | NET CASH: | £7.46m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 162 | -2.6 | -13.0 | 5.45 |
| 2014 | 169 | 6.2 | -0.2 | 6.27 |
| 2015 | 179 | 12.5 | 9.1 | 7.21 |
| 2016 | 225 | 6.8 | 0.2 | 8.29 |
| 2017 | 252 | 9.3 | 3.4 | 9.53 |
| % change | +12 | +37 | +1615 | +15 |
| Ex-div: | 7 Jun | |||
| Payment: | 6 Jul | |||
| *Includes intangible assets of £48.5m, or 59p a share | ||||
