Profits at M&C Saatchi have fallen by 87% year-on-year to £700,000, dropping from £5.4m in 2022.

The communications firm also saw its revenue drop by 2% in the same period to £453.9m.

M&C Saatchi put this drop in revenue and profit down to a "challenging" market, which was also felt by most businesses in the advertising sector.

Executive chair at M&C Saatchi, Zillah Byng-Thorne, said: "Our financial results not only reflect the challenging market environment our businesses operate in, but also the considerable progress that has been made in shaping the group to best deliver sustainable growth in the future."

However, the group said that it had made "significant progress in delivering its efficiency and transformation plans", which include annualised cost efficiencies of £3.9m achieving in the last financial year.

The firm added that it remains on course to deliver an additional £6.1m of savings by the end of 2024.

M&C Saatchi said that its new operating model and go-to-market strategy is "bringing us closer to clients and better aligning our global capabilities with their needs".

Looking forward, the firm said that it is confident in meeting its 2024 financial year expectations, which have been underpinned by "encouraging Q1 momentum", despite continuing macroeconomic uncertainty.

Byng-Thorne added: "We delivered a materially better financial performance in the second half of the year, following the more challenging start to the year. This was partly led by impressive contributions from issues and passions. The biggest drivers of improvement were our own proactive actions on costs, accelerating our structural transformation, and closing or divesting a number of loss-making businesses which drove operating margin up from 8.3% in the first half to 16.9% in the second half.

"Although much has already been achieved in transforming our group, there is more to do and 2024 will deliver further progress. The market environment remains challenging, but 2024 will also benefit from the full-year impact of the actions we have already undertaken and the planned actions we are yet to deliver. This report will cover what we have been doing to improve our group and lay the foundations for what we all believe will be an exciting future for the company and all of its stakeholders."

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