10 April 2024 , 10:32
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Creative solutions company M&C Saatchi has reported a huge plunge in profits amid tough trading conditions.
The company saw its profit before tax nosedive by 87% in 2023 to just £700,000, down from £5.4million the year before. Revenue also fell 2% to £453.9 million. M&C Saatchi said it embarked on major cost-saving measures following a "challenging" market last year which hit most advertising firms.
This included reducing the size of the business, closing or winding down several smaller offices in Asia and leaving some of its smaller UK operations. The agency also sold off stakes in subsidiaries and investments, helping it to meet expectations this year, according to the business.
However, M&C Saatchi admitted there was "much more to do" to improve the company. "2023 was a year of strategic progress. We have begun to transform into a leaner and more agile business laying the groundwork for sustained growth and improved profitability ahead," said executive chair Zillah Byng-Thorne.
"There is much more to do on simplifying how we interact with our clients and evolving our go-to-market strategy." During 2023, the business reported cost savings of £3.9million. The advertising industry has been hit hard as the cost-of-living crisis has left consumers with less disposable income to spend on products advertised.
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Consequently, many businesses have cut back on their advertising budgets over the past year. M&C noted that while there were "early signs" six months ago that marketing budgets were starting to recover, this has now been confirmed. "We delivered a materially better financial performance in the second half of the year, following the more challenging start to the year," it stated.