M&C SAATCHI today shrugged off worries in the wider marketing industry as the advertising group’s half-year revenues surged 15% on a like-for-like basis to £82.8 million.
Chief executive David Kershaw said M&C was benefitting from the “micro” effect of winning new business, including public relations for Twitter and Spotify and customer relationship management for O2.
The group is also seeing strong demand for mobile marketing and got an Olympic boost from clients such as Coca-Cola and Transport for London. Kershaw said M&C’s fortunes contrasted with the “macro” picture in the UK. “You can’t see the market overall growing by more than 2% or 3%,” he said. “So for us growing by 15% is hugely encouraging.”
Its research arm, Clear, was the weak performer as clients look for an immediate return on investment, rather than spending on research that might only pay off in a year or two. “Marketing directors who are no doubt under pressure are being more choosy about investing in the short term, rather than the medium term,” explained Kershaw.
Pre-tax profits before exceptionals jumped 13% to £8.7 million, although the group took a £2 million accounting hit as the value of share options rose. M&C shares are up 36% this year.
M&C has a £14 million cash pile, prompting Fiona Orford-Williams, analyst at Edison Investment Research, to suggest the group could go on the acquisition trail. But Kershaw, describing the group as a “federation of entrepreneurs”, said: “We prefer starting businesses to paying large amounts of money and racking up debt.”
