(Alliance News) - Shares in M&C Saatchi PLC were 3.3% lower at 177.53 pence on Tuesday afternoon in London, despite the company reporting record revenue and headline profit for 2022, as its statutory pretax profit figure plunged.
The London-based advertising agency reported a pretax profit of GBP5.4 million in 2022, more than halved from the GBP21.6 million achieved in 2021.
M&C Saatchi said the figure was adversely affected by a GBP10.8 million one-off defence cost relating to two separate failed takeover bids for the company last year from AdvancedAdvT Ltd and Next Fifteen Communications Group PLC.
It also came as the firm's project costs climbed to GBP191.4 million from GBP145.2 million, and its staff costs rose to GBP198.8 million from GBP172.5 million.
Meanwhile, the company's headline pretax profit rose 17% to GBP31.8 million from GBP27.3 million. The headline results represents the underlying trading profitability of the company. Statutory revenue also jumped 17%, rising to GBP462.5 million from GBP394.6 million. M&C Saatchi said both of these figures were a record for the company.
Chief Executive Moray MacLennan said: "Another year of record results, in a year not without challenges. Through a relentless focus on developing core capabilities both within and beyond advertising, alongside careful cost management, we have delivered high-margin and high-revenue growth and are pleased to reinstate dividend payments.
"We approach 2023 with guarded optimism. Whilst macroeconomic uncertainties will require careful navigation and management, we have a clear roadmap in place and look forward to building on our solid foundations for profitable growth."
Looking forward, M&C Saatchi said it expects headline pretax profit for 2023 to be in-line with market expectations of between GBP36.5 million and GBP38.0 million. This would represent an increase at least 15% from 2022, if achieved.
The company said it will resume dividend payments in 2023. It said it intends to adopt a progressive dividend policy, targeting a payout ratio of 25% in the medium term. It recommended a final dividend of 1.5 pence per share.
By Heather Rydings, Alliance News senior economics reporter
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M&C Saatchi (SAA)