M&C Saatchi PLC 2023 Full Year Trading Update (0650A)

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RNS Number : 0650A

M&C Saatchi PLC

18 January 2024

M&C SAATCHI PLC

(the "Company" or "M&C Saatchi")

2023 Full Year Trading Update

Profit performance in line with expectations

Continued strong growth in Issues and Passions specialisms

M&C Saatchi is pleased to announce a trading update for the twelve months ended 31 December 2023 ("FY 2023"). As set out at the Interim Results, we saw improved momentum in H2, with particularly strong performances in our Issues and Passions specialisms.

FY 2023 Headline profit before tax is expected to be in line with market expectations, underpinned by strong H2 profit improvement as a result of cost saving initiatives and a simplified structure, with H2 Headline operating profit margin expected to have improved to 16% from 8% in H1. Full year net revenue is expected to be GBP252m, representing a reduction of 7% versus 2022 (FY 2022: GBP271m).

Net cash at 31 December 2023 was GBP8.2m (31 December 2022: GBP30.0m), reflecting the settlement of put options and some changes in the mix of working capital; the Company has access to additional undrawn facilities of GBP31m.

M&C Saatchi expects to announce its financial results for the twelve months to 31 December 2023 in April 2024.

Zillah Byng-Thorne, Executive Chair said:

"It was an encouraging end to 2023 with the benefit of our strategy to focus on our priority markets, growth specialisms and the global transformation programme all beginning to have an impact in the business. Whilst economic headwinds remain, we are pleased with the progress we are making on building an enhanced and more connected operating model, which will accelerate our growth trajectory and achieve our ambitions."

CEO Search Update

The Board has appointed Odgers Berndtson to assist with the process to find a new Chief Executive Officer and this is well progressed. The Company will update the market, as and when appropriate. In the interim, Zillah Byng-Thorne, the Board's Non-Executive Chair, continues to act as Executive Chair.

Further Announcement regarding Divestment of Subsidiary

Further to the announcement on 22 December 2023, the Company has completed the divestment of M&C Saatchi Holdings Asia Pte. Limited ("M&C Saatchi Asia"). M&C Saatchi Asia primarily traded as the Company's creative agency in Indonesia.

The Company's entire interest in M&C Saatchi Asia has been acquired by Anish Daryani, being a director of M&C Saatchi Asia, for aggregate cash consideration of c.GBP500k. In the year ended 31 December 2022, M&C Saatchi Asia generated profit before tax of c.GBP340k and is expected to break-even in the year ended 31 December 2023.

Related party transaction

The divestment of M&C Saatchi Asia is considered to be a related party transaction, for the purposes of AIM Rule 13 of the AIM Rules for Companies, due to the acquisition of the Company's interest in M&C Saatchi Asia being acquired by a director of the subsidiary. For the purposes of the AIM Rules for Companies, the directors of M&C Saatchi, having consulted with the Company's Nominated Adviser, Liberum Capital Limited, consider the terms of this divestment to be fair and reasonable so far as its shareholders are concerned.

 
 For further information please 
  call: 
  M&C Saatchi plc                                                 [phone] 
 Zillah Byng-Thorne, Executive Chair 
  Bruce Marson, Chief Financial Officer 
 Deutsche Numis                                                   [phone] 
 Nick Westlake, Iqra Amin 
 Liberum                                                          [phone] 
 Max Jones, Benjamin Cryer, Will 
  King 
 Headland Consultancy                                             [phone] 
 Stephen Malthouse, Charlie Twigg 
 

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January 18, 2024 02:00 ET (07:00 GMT)