What’s next for buoyant M&C Saatchi?

The ‘nothing is impossible’ boys at M&C Saatchi surprised the City of London yesterday by announcing an 11 per cent increase in revenue in the six months to June 30 although pre-tax profits fell by 15 per cent to £4.84m chiefly due to payments associated with its Inside Mobile mobile agency acquisition.

That the figures to end June have only just emerged is also a bit of a surprise but you can’t be good at everything.

CEO David Kershaw said the group was still intent on expansion but he said this could be achieved “without any major M&A,” which presumably means a big deal. But M&C can only achieve so much through its policy of organic growth and small bolt-on acquisitions.

Broker Numis is forecasting revenues for the year of around £58m which makes M&C about half the size of marcoms rival Chime, run by another old Saatchi hand Lord Bell. Chime’s half year profits were £12.3m, reflecting Bell’s primary focus on PR which appears to be more profitable than advertising at the moment, probably because its practitioners are paid less.

But M&C has built a strong position in the UK market, where it’s bigger than the Publicis Groupe-owned Saatchi Fallon, and has opened a number of office overseas including newish ones in Brazil, China, India and South Africa.

These can be a mixed blessing of course as BBH’s current difficulties in New York demonstrate (the one-time UK high flyer has lost both its US group chairman and creative director recently).

If M&C really wants to become a player on the world stage it will have to do a big deal sometime. The chatter surrounding its 40th birthday party held in tandem with the other Saatchi was that it would like to, somehow or other, regain its international network from Publicis Groupe.

This looks pretty unlikely, for as long as Publicis boss Maurice Levy is around anyway, although it would be the kind of transformational deal Maurice Saatchi and some of the others would like to achieve before they are dragged kicking and screaming into retirement.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.