M&C Saatchi slashes guidance and cuts jobs amid ad industry woes

M&C Saatchi on Thursday warned that revenues will fall this year as the London-listed advertising group faces a softer market and cautious clients amid macroeconomic headwinds. The agency said it expects like-for-like sales to decline in the mid-single digits for the year to December 31, with annual profit broadly in line with last year, and it flagged further cost cuts, including reductions to central HQ roles that will be replaced overseas.

For the six months to June 30, like-for-like operating profit fell 36% to £10.3 million, dragged by heavy upfront investments and a drop in revenue. Like-for-like net revenue was £103.8 million, down 5.1% from a year earlier. Australia was the biggest drag, with revenue down 26.5% in the period as clients cut spend and last year's results carried losses. The group said performance across its UK advertising and consulting arms was soft in the period.

Zaid Al-Qassab, M&C Saatchi chief executive, said: "After a solid start to the year, we have not been immune to the market conditions of the wider industry, as clients reacted cautiously to geo-political tensions and the unstable macro-economic environment." The company said it would continue to "simplify its operating structure and improve efficiency" across the group, and that the next stage of its global efficiency programme would identify and reduce central HQ roles, to be replaced overseas to save costs. The group disclosed redundancy costs of £854,000 within non-like-for-like restructuring for ongoing businesses and £224,000 within like-for-like staff costs.

Looking ahead, the company said the rest of 2025 remains soft, squeezed by macro volatility and subdued conditions in Australia and the UK, though stronger demand is seen in Europe, the United States and the UAE. The results reflect a broader downturn in the advertising industry, with rivals such as S4 Capital reporting falling sales and widening losses; WPP has traded at multi-year lows and Publicis Groupe overtook WPP as the world's largest ad agency last year.

Analysts had expected operating profit to rise to £37.6 million for 2025, underscoring the gap between market expectations and the company’s latest outlook. Shares in M&C Saatchi were down 4.18% on Thursday, at 160.50 pence, after a 17% decline over the past 12 months.

M&C Saatchi said it would continue to simplify its operating structure and improve efficiency, with a plan to replace central HQ roles overseas and to pursue cost savings through its global efficiency programme. The group also stressed that it remains focused on growth potential in Europe, the United States and the UAE, despite headwinds in key markets. Investors will be watching whether the firm can regain momentum as macro conditions improve.