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(Alliance News) - M&C Saatchi PLC on Friday reported a strong 2021 and said it plans to resume dividends, while forecasting further profit growth in the years ahead.
Shares in the London-based advertising agency were up 6.4% at 190.43 pence on Friday morning.
Revenue in 2021 amounted to GBP394.6 million, up 22% on 2020's GBP323.3 million. Net revenue increased by 11%, or by 15% on a like-for-like basis.
"The group performed well ahead of expectations. Whilst there were stand-out performers amongst individual entities, we saw growth across the board, across virtually all entities and specialisms," the company said.
The firm swung to a pretax profit of GBP21.6 million - which it noted was a record figure - from a loss of GBP8.5 million the year before.
Headline pretax profit was GBP27.3 million, surging from GBP8.3 million the year before, and the company expects this to grow further over the coming years.
M&C Saatchi expects headline pretax profit of GBP31 million in 2022 and GBP41 million in 2023, as it said strong trading momentum in 2021 has continued into the new year.
"The strong trading performance has further strengthened the group's cash position, providing the balance sheet flexibility to settle put option liabilities as they fall due in 2022, resume the payment of dividends and to continue the delivery of the group's accelerated growth strategy," the company said.
It plans to reinstate dividends from 2022.
M&C Saatchi added that talks with AdvancedAdvT Ltd over a possible takeover offer continue.
On Thursday, M&C Saatchi said it has been granted an extension to the 'put-up-or-shut-up' deadline for talks, with AdvT now having until May 10 to either make a firm offer or walk away.
In February, the company received an increased approach of 1.939 new AdvT shares, plus 40 pence in cash, for each M&C Saatchi share. This was up from 1.633 shares and 40p previously.
"The unanimous conclusion of the independent directors continues to be that the further revised proposal undervalues the company and its prospects and would therefore not be recommendable. However, the independent directors believe that it is in the best interests of all stakeholders in M&C Saatchi to continue to engage constructively in discussions with AdvT," it said in Thursday's statement.
Shares in AdvancedAdvT, a London-listed acquisition vehicle, were up 3.8% at 81.50p on Friday.
By Lucy Heming; lucyheming@alliancenews.com
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