M&C Saatchi, the advertising agency founded by the Saatchi brothers, yesterday reported a 9 per cent rise in interim pre-tax profits and announced plans to open its first European office.
The agency, whose clients include BA, Royal Bank of Scotland and Foster’s, reported first half pre-tax profits of £3.7 million, its maiden set of results since floating in July.
New accounts such as Halfords, London Olympics 2012 and KFC helped to increase revenues by 10 per cent to £29.8 million.
Lorna Tilbian, an analyst at Numis Securities, said: “These are a pretty respectable set of results with which to start public life.
“The growth has been driven by the Far East, which has a robust economy, while the agency is growing its business in the US.”
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M&C Saatchi increased operating profits from its Asia and Australian unit by more than four times to £693,000, as significant new business wins such as Optus, the Australian telecoms business, pushed revenues up by 31 per cent to £10.9 million. In the UK, pre-tax profits remained flat at £3.3 million as revenues declined by 0.4 per cent to £17.6 million.
David Kershaw, M&C Saatchi’s chief executive, said the company had made a “solid start” to the second half of the year, with new business from customers such as Harrods and Drambuie, but said the industry remained cautious about the future.
He said: “There’s still a net positive sentiment out there but people are not making commitments as far out as they might have six months ago because of rising interest rates and concerns about consumers’ disposable income.”
Mr Kershaw added that M&C Saatchi planned to open its first European office in the first half of next year, in either France or Germany.
He said: “The IPO was intended to raise money to fund the organic growth of our company. We have identified France, Germany, Italy and Spain as the key areas and would hope to open offices in two of those countries next year.”
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M&C Saatchi’s shares rose by 2.5p, or 2 per cent, to close at 134p, against the 125p float price.