M&C Saatchi's profit tumbled by 34 percent to £19 million for the year to December 2025, according to the company. The firm expects to suffer from its exposure to the softer UK market, where it saw revenue fall by 4.6 percent to £103 million. M&C Saatchi blamed its falling revenue primarily for the US government shutdown at the end of last year and the impact of tariffs. The company said government revenues were lost while staffing had to be maintained due to uncertainty about the timing of funding and work restarting.
Advertising firm M&C Saatchi expects the Iran war to deal a blow to its sport and entertainment business. However, M&C Saatchi reported growing revenue in the Middle East, up 3.6 percent to £11.6 million. The firm has not specified what measures it will implement to address the expected impact of the conflict on its operations.
Macroeconomic challenges remain, while the conflict in the Middle East is likely to significantly impact our sport and entertainment and consumer-facing business.
M&C Saatchi's share price jumped by one percent on Monday's market open to 116p, but the stock is down 15 percent in the year so far. This market reaction reflects investor concerns amid the company's financial struggles.
Leadership changes have added to the turmoil, with M&C Saatchi's chief executive Zaid Al-Qassab walking away last month. Dame Heather Rabbatts has stepped up from non-executive chair to lead M&C Saatchi while it searches for a successor to Al-Qassab. The exact timeline and details of the search for a successor remain unclear.
Government revenues were lost while staffing had to be maintained due to uncertainty of the timing on the restart of funding and work.
M&C Saatchi is facing pressure from within to reform or face a break-up sale. Activist investor Harwood Capital, which owns 6 percent of M&C Saatchi, is said to be pushing for a piecemeal sale of M&C Saatchi's various businesses. The specific reforms or break-up sale options being considered have not been disclosed.
Stock broker Panmure Liberum said M&C Saatchi's decision to maintain headcount despite the loss of government revenue has paid off as the business has seen a ramp up at the start of this year. This perspective highlights strategic decisions amid the challenges.
M&C Saatchi was founded by Maurice and Charles Saatchi in 1995, after the brothers were ousted from Saatchi & Saatchi. The company's historical context underscores its legacy in the advertising industry as it navigates current difficulties.