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(Alliance News) - Shares in M&C Saatchi PLC plummeted Tuesday after the advertising firm warned annual profit could be as much as 10% lower than expected, after interim results struggled.
Shares in M&C Saatchi were 12% lower at 151.00 pence in London on Tuesday.
For the six months ended June 30, pretax profit doubled to GBP9.4 million from GBP5.0 million the year prior. This was after revenue rose 0.7% to GBP214.2 million from GBP212.8 million the year before.
Profit performance was helped by a GBP11.6 million gain booked on the disposal of an associate. No such gain was recorded the year prior.
On a headline basis - excluding one-off transactions - pretax profit fell two-thirds to GBP3.4 million from GBP10.3 million the year prior.
"Our results in the first half of 2019 have been impacted by the number of new businesses in the group as well as the weighting of revenues shifting towards the second half of the year," M&C Saatchi Chief Executive Officer David Kershaw said.
M&C Saatchi proposed a 2.45 pence per share interim dividend, unchanged on the year prior.
"Whilst this has had a short term impact on our results, we remain confident in and committed to our strategy of winning new business and investing in new, fast-growing businesses," Kershaw added. "Looking to the second half, our pipeline of new business is strong across the network, and our newest businesses are performing well and expected to start making a meaningful contribution to the group."
For the full year, however, M&C Saatchi warned pretax profit, before exceptional items, would be between 5% and 10% below original expectations. Annual profit was set to be held back due to the greater proportion of profits coming from those in higher tax jurisdictions.
By Ahren Lester; ahrenlester@alliancenews.com
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