M&C Saatchi's profits rise to cover loss of BA account
LONDON - M&C Saatchi has posted an 8.7% rise in gross profits for the first half of 2006, replacing revenue from the loss of the £60m British Airways account last year.
The agency has said its revenues are up to £34.7m in the six months ending June 2006, from £31.9m in the same period the previous year, "comfortably replacing the lost revenue from British Airways", which represented around 7% of the agency's income.
BA appointed Bartle Bogle Hegarty to handle its £60m advertising account last October, which ended M&C Saatchi's 23-year association with the airline.
In other areas, M&C Saatchi has made good progress, winning new business such as Ribena, Lucozade and Allied Bakeries' Kingsmill business, and its full-year profits are "significantly ahead" of expectations.
The UK has been the strongest driver of growth, up 6.6%, with strong performances from its media planning and buying, direct marketing and PR businesses. Asia and Australasia were up 7.2% to £12.3m and North America up 11.3% to £1.6m.
However, pre-tax profits across the agency fell 29.8% to £2.9m from £4.1m the previous year, following investment in new offices in India, Thailand and France, to drive the growth of the network.
David Kershaw, chief executive of M&C Saatchi, said: "This has been an encouraging year with the business showing real momentum. Although our profits have been impacted by further investment to support revenue growth and expansion into markets, this leaves us well placed to build on our position.
"The new-business pipeline remains strong and we expect profits for the full year to be significantly ahead of our previous expectations."
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