M&C Saatchi (SAA) H2 2025 earnings summary

Executive summary

• 2025 results were impacted by macroeconomic weaknesses and market volatility, especially from Q2 onwards, with notable challenges in Australia and a 43-day U.S. government shutdown affecting high-margin Issues business.

• Leadership changes and completion of phase two of the transformation program focused on centralising production, data, and products, and restructuring in Australia.

• The group maintained financial resilience, ending the year with a net cash balance of £13.3 million after two M&A transactions and put option payments.

• Strong client retention at 94% and 219 new business wins, with continued focus on unlocking intrinsic value through data, AI, and connected specialisms.

• The business is investing in data and AI-enabled processes to drive growth and leveraging expertise across government and commercial sectors.

Financial highlights

• Like-for-like net revenue for 2025 was £204.7 million, down 7.3% year-over-year, mainly due to macroeconomic factors and challenges in Australia.

• Operating profit declined by 26.1% to £24.9 million, with margin down 310bps to 12.2%.

• Net cash increased to £13.3 million, with inflows from working capital offset by outflows for bonuses, M&A, and dividends.

• Media division grew 11.5% to £25.2 million, accelerating from the previous year.

• Basic EPS decreased 44.7% to 9.4p; operating cash conversion was strong at 94%.

Outlook and guidance

• Targeting increases in group operating profit and net revenue in 2026, driven by growth in Issues and Media divisions and cost program annualization.

• Q1 2026 trading is in line with expectations, providing a platform for growth in Q2 and beyond.

• No final dividend outflow in 2026; funds will support a £4.5 million share buyback program.

• Conflict in the Middle East expected to impact Sport & Entertainment and consumer-facing businesses.

• Operating cash conversion rate to remain above 80%.