M&C Saatchi PLC on Wednesday reported a decline in profit, citing challenging market conditions for advertising, consultancy and media, as it aimed to simplify how to target its clients.

The London-based communications company said pretax profit dropped 87% to £715,000 in 2023 from £5.4 million in 2022. Adjusted pretax profit fell 10% to £28.7 million from £31.8 million.

Revenue edged down 1.9% to £453.9 million from £462.5 million. Project cost or direct cost decreased 5.1% to £201.1 million from £191.4 million.

M&C Saatchi proposed a final dividend of 1.6p, up 6.7% from 1.5p a year prior.

Executive Chair Zillah Byng-Thorne said: ‘2023 was a year of strategic progress. We have begun to transform into a leaner and more agile business laying the groundwork for sustained growth and improved profitability ahead. There is much more to do on simplifying how we interact with our clients and evolving our go-to-market strategy. With strengthened cash generation, we expect to re-invest in value accretive opportunities to enhance shareholder returns.’

On Tuesday, the company had announced a divestment of shares in the M&C Saatchi South Africa Group, which includes M&C Saatchi Abel, Connect, Levergy, Razor, Dalmatian and Black & White. The shares will be bought by ‘existing local leadership teams’ for a cash consideration of £5.6 million.

Looking ahead, M&C Saatchi said it is confident in meeting expectations for 2024, noting an ‘encouraging’ momentum in the first quarter of the year.

The firm said: ‘We are well progressed on building a simplified operating model which places our regional focus and global specialist expertise at the heart of everything we do. This will ensure we can continue to be unashamedly bold, creative, entrepreneurial and fearless in the work we do with our clients.’

Shares in M&C Saatchi were down 2.2% at 171.20 pence each in London on Wednesday afternoon.

Copyright 2024 Alliance News Ltd. All Rights Reserved.