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(Sharecast News) - M&C Saatchi reported lower revenue and profit for 2025 on Monday, as a challenging macroeconomic backdrop and disruption in the US weighed on second-half performance, while the group set out plans to return to growth in 2026.
On a like-for-like basis, net revenue fell 7.3% to 204.7m, while operating profit declined 26.1% to 24.9m, with margins contracting by 310 basis points to 12.2%.
Statutory net revenue dropped 9.2% to 210m and operating profit more than halved to 10.2m from 22.5m, reflecting restructuring costs and the closure of its Australian media buying business.
Pre-tax profit fell 33.6% on a like-for-like basis to 19.4m, while statutory PBT declined 74.6% to 4.6m.
Basic earnings per share dropped to 9.4p on a like-for-like basis, while statutory EPS turned negative at a loss of 1.9p.
The AIM-traded company said net revenue, operating profit and net cash were in line with its November 2025 guidance.
Net cash rose to 13.3m from 11.8m a year earlier, supported by a 94% operating cash conversion despite two acquisitions during the year.
Performance was hit by what the group described as an "unprecedented US government shutdown" in the fourth quarter, tariff-related disruption in the US earlier in the year and a tougher macroeconomic environment.
The decline in profitability also reflected prior-year investments and the impact of weaker high-margin work in its Issues division.
"Our 2025 financial performance was impacted by the tough market context and the board is clear on the action that the business needs to take; our focus will be to simplify the businesses, to refine our go-to-market offer and to unlock the intrinsic value of the company," said executive chair Dame Heather Rabbatts.
"Whilst we expect continued market uncertainty, we are confident in targeting net revenue growth and operating profit growth in 2026, in line with current market expectations.
"With a unique market position, a deep understanding of our clients' business, broad expertise across both government and commercial sectors and specialised data-driven systems, the board believes that the company is well-positioned to create value for shareholders."
The group said it would not propose a final dividend for 2025, instead reallocating funds towards an enhanced share buyback programme, reflecting its view that this would deliver greater shareholder value.
M&C Saatchi also highlighted strong client retention of 94% and increased use of data and artificial intelligence across its operations, alongside its first acquisitions in seven years, Dune 23 and The Women's Sports Group.
Looking ahead, the company said first-quarter trading was in line with expectations despite a tough comparative period and ongoing macroeconomic challenges.
It said it was targeting net revenue and operating profit growth in 2026, supported by momentum in its Issues and Media divisions and regional expansion in the US and Europe, although it warned that continued uncertainty, including the conflict in the Middle East, could weigh on parts of its business.
At 0928 BST, shares in M&C Saatchi were down 0.69% at 114.2p.
Reporting by Josh White for Sharecast.com.
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