M&C Saatchi eyes expansion as profits increase 53%

M&C Saatchi saw 53% increase in pre-tax profit to £11.9m in 2007, according to its 2007 annual report. The group is now eying further expansion into the Middle East and Eastern Europe following a number of regional and global business wins.

The last year marked the company’s third full year since it floated in 2004. Over that period revenue has risen by 41% and headline profit before tax is up by 47%. However, at the time of drafting the report, its share price since flotation had fallen by 12%.

Jeremy Sinclair, the company chairman, says to counter this it intends to continue investing in higher margin and higher growth sectors. Last year, it acquired brand consultancy Clear Ideas and increased its stake in media agency, Walker Media.

Sinclair says: “We will continue to expand geographically. During the year the group won regional and global business in Europe, Asia and Australasia, including Jameson, Jet Airways and Westfield. We are also finding a healthy demand for our services in two new areas: the Middle East and Eastern Europe. If sufficient demand is received, we may well expand our offering in these areas in 2008.”

David Kershaw, M&C Saatchi chief executive, says the UK performed well in 2007, with Walker Media making a strong contribution to the bottom line. Its operating profit rose 32.4% to £8.4m, while revenue grew 18.9% to £52.8m.

The group’s significant new business wins in the UK included Ladbrokes, Findus and Macleans.

“Despite concerns with the economic environment, we believe 2008 offers prospects for growth from the strength of our core operations, a broader geographic base and acquisitions made in 20007,” Kershaw says.