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A bruising 2025 for M&C Saatchi with profit down, but cash conversion strong. Dividend axed for buybacks under new exec chair, eyeing 2026 rebound.
This article covers information on Mu0026C Saatchi PLC.
LON:SAAM&C Saatchi’s 2025 was a slog. Like-for-like (LFL) net revenue fell 7.3% to £204.7 million, with LFL operating profit down 26.1% to £24.9 million. LFL adjusts for FX, acquisitions/disposals and exceptional items – a cleaner read on underlying trading. Statutory results, which include everything, were weaker still.
Despite that, cash generation held up well and net cash edged higher. The Board has also shifted capital returns from dividends to buybacks under new Executive Chair, Dame Heather Rabbatts.
| Key metric | 2025 | 2024 | Change |
|---|---|---|---|
| LFL net revenue | £204.7m | £220.9m | -7.3% |
| LFL operating profit | £24.9m | £33.7m | -26.1% |
| LFL operating margin | 12.2% | 15.3% | -310 bps |
| LFL profit before tax | £19.4m | £29.2m | -33.6% |
| Statutory net revenue | £210.0m | £231.4m | -9.2% |
| Statutory operating profit | £10.2m | £22.5m | -54.7% |
| Basic EPS (statutory) | (1.9)p | 9.6p | n/a |
| Basic EPS (LFL) | 9.4p | 17.0p | -44.7% |
| Net cash | £13.3m | £11.8m | +£1.5m |
| Operating cash conversion | 94% | 85% | +9 pps |
Management says results were in line with November 2025 guidance. The shares now pivot to what happens under the new leadership and the 2026 outlook.
Three external hits did the damage: an “unprecedented” US Government shutdown in Q4, the US tariff fallout in Q2 and Q3, and a weak macro backdrop – notably Australia. When the US Government shuts down, M&C’s high-margin Issues work stops but the teams must be retained, so margins take a double whack.
Statutory profit was further depressed by one-off items (£9.1 million pre-tax), restructuring and the September closure of the Australian media buying business. Group central costs fell sharply to £6.1 million (from £12.4 million) thanks to the absence of an LTIP charge, higher recharges and 2024 savings annualising.
The Board intends to reallocate what would have been the 2025 final dividend to an enhanced share buyback programme, arguing this will create greater shareholder value. That decision remains subject to formal Board approval. The Company paid a 1.95p dividend for 2024; there is no 2025 final dividend proposed under this plan.
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Why it matters:
M&C Saatchi’s mix has evolved – Non-Advertising now represents 67% of LFL net revenue. 2025 performance by Specialism was mixed:
Margins followed the mix: Non-Advertising operating margin fell to 17.1% (-8.8 pps) given the Issues slowdown, while Advertising held an 11.3% margin, reflecting cost control and resizing in Australia.
Regionally, the UK remains the largest contributor at 50% of LFL net revenue, boosted by the inclusion of Issues. 2025 LFL net revenue movements:
The transformation and efficiency programmes are doing the heavy lifting: £7 million of annualised savings from the latest global efficiency and restructuring, plus a further £5 million from Phase Two centralisation and consolidation. These stack on top of £10 million annualised savings from Phase One completed in 2024.
Alongside that, the Group is embedding data and AI across specialisms to support creativity and performance measurement, under its Cultural Power proposition. If revenue growth returns, these savings should translate to operating margin improvement.
Q1 2026 trading is in line with expectations. For 2026, the Company targets net revenue growth and operating profit growth, in line with market estimates, with positive momentum in Issues and Media and regional support from the US and Europe. Management also targets improved operating margin and expects operating cash conversion of over 80%.
Risks remain: macro uncertainty persists, and the conflict in the Middle East is likely to significantly impact sport & entertainment and parts of the consumer-facing book.
Dame Heather Rabbatts became Executive Chair in April 2026 after serving as Non-Executive Chair. The Board has been refreshed, with Nicholas Shott joining as an Independent Non-Executive Director and Vin Murria appointed to support value creation. The strategic message is clear – simplify, refine the go-to-market offer, and “unlock intrinsic value”.
Investors can find the results presentation replay on the Company’s website: mcsaatchiplc.com.
2025 was bruising, with external shocks landing squarely on M&C Saatchi’s highest-margin work. The statutory loss and lower LFL profits reflect that reality. The positives: strong 94% cash conversion, modestly higher net cash, sharply lower central costs, and clear cost-saving run-rate heading into 2026. Media is growing, and Issues should rebound if US Government activity normalises.
The switch from dividends to buybacks makes sense given cash generation and the Board’s view that the shares are undervalued – though we need the specifics. Execution now matters more than rhetoric: deliver growth in Issues and Media, hold the line in Australia, and let the savings drop through. If those boxes are ticked, the ingredients are here for EPS and margin improvement in 2026.
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