M&C Saatchi has reported a sharp decline in revenue and profits for 2025 but says it is targeting a return to growth this year as it looks to simplify the business and unlock shareholder value.
Like-for-like net revenue fell 7.3% to £204.7m, hit by the unprecedented US government shutdown in the fourth quarter, tariff-related disruption in Q2 and Q3, and a difficult macroeconomic backdrop.
Operating profit dropped 26.1% to £24.9m on a like-for-like basis, with margins contracting 310 basis points to 12.2%.
The board has opted to scrap the dividend entirely, redirecting those funds into an enhanced share buyback on the basis that it will generate greater shareholder value.
No final dividend will be proposed for 2025, compared with 1.95p the previous year.
Dame Heather Rabbatts, who took over as executive chair in early April, said the priority is to simplify the group’s structure, sharpen its market proposition, and unlock what the board sees as the business’s intrinsic value.
Mark Crouch, market analyst for eToro, said: “M&C Saatchi’s full year results underlines just how tough the backdrop remains for marketing and communications businesses, with macro pressures and geopolitical disruption clearly feeding through into top and bottom line performance. A 7.3% like-for-like revenue decline and a sharper 26% drop in operating profit highlight the operational gearing in the model, particularly when higher-margin segments such as Issues are disrupted.”
“That said, the picture isn’t without encouragement. Cash generation remains robust, with conversion at 94% and net cash edging higher despite acquisition activity, pointing to a resilient and capital-light structure. Management’s decision to pivot away from dividends towards an enhanced share buyback also signals confidence in the underlying valuation, even if it may divide income-focused investors.”