M&C Saatchi (SAA) H2 2024 earnings summary

Executive summary

• Achieved strong and resilient business performance in 2024, with 3.7% like-for-like net revenue growth to GBP 231 million and operating profit up 5.2%, supported by a successful transformation program delivering GBP 10 million in annualized cost savings and a further GBP 3 million targeted for 2025.

• High-margin, non-advertising specialisms now represent 67% of group net revenue, driving margin improvement and underpinning future growth.

• Client retention remained robust, with 2024 clients accounting for 92% of 2023 revenue, and 140 new business wins, especially in the Middle East and Europe.

• Transformation initiatives centralized back-office operations in Cape Town, covering 85% of in-scope revenue.

• 141 industry awards were won in 2024, reflecting competitive positioning.

Financial highlights

• Like-for-like net revenue grew 3.7% year-over-year to GBP 231 million, while statutory net revenue declined 2.2% due to FX and discontinued operations.

• Operating profit rose to GBP 35.2 million, with operating margin up 20 basis points to 15.2%.

• Adjusted net cash increased 84% to GBP 15.3 million, despite GBP 8.6 million in put option settlements.

• Earnings per share grew 6.1% like-for-like to 17.6p; dividend per share up 21.9% to 1.95p, maintaining cover.

• Operating cash conversion reached 85%.

Outlook and guidance

• FY 2025 expected to be in line with market expectations, with continued reinvestment of savings into growth and ongoing investment in Issues, Media, and the Middle East.

• Flexibility maintained to adjust plans in response to macro volatility.

• Ongoing shift to higher-margin, non-advertising specialisms and further margin accretion targeted.

• Targeting over 80% operating cash conversion.

• Portfolio expected to broaden and diversify, mitigating market volatility.