Saatchi & Saatchi pre-tax profits rose 68 per cent last year to Ãº32.4m, but its level of average net debt was also up Ãº6m to Ãº118m for December 1994.
The increased debt seems sure to affect negotiations with its banks to extend banking facilities into 1997. The effect will be especially dramatic in the wake of recent losses, including the Ãº200m Mars defection from Bates and the BA global review.
The agency’s debt position is blamed on extraordinary one-off payments and is revealed in the group’s annual figures. “The last three months have been extremely eventful,” says the results statement. “Inevitably, the turmoil will affect our performance in 1995. Instead of being a year of recovery, it will prove to be a year of transition.”
But chief executive and acting chairman Charlie Scott remains optimistic. “The results show a further step forward in our recovery but there remains plenty of room for improvement.”
Top line group revenues slipped three per cent to Ãº775.4m. While operating profit rose 40 per cent to Ãº44.5m.