Advertising firm M&C Saatchi expects the Iran war to deal a blow to its sport and entertainment business, and revealed a profit slump for last year.
For the year to December 2025, profit tumbled by 34 per cent to £19m. Revenue dipped by more than seven per cent to £205m.
The firm, whose chief executive Zaid Al-Qassab walked away last month, is facing pressure from within to reform or face a break-up sale.
The Aim-listed company reported growing revenue in the Middle East – up 3.6 per cent to £11.6m – but said it expects the conflict to impact performance across its wider entertainment and consumer-facing advertising.
Simon Fuller, the advertising firm’s chief financial officer, told City AM: “We have seen some event delays and cancellations. There has been some reduction in PR activity. But equally we’ve got a number of clients in the region that we’re supporting through the period.”
US government shutdown hurt revenue
M&C Saatchi said it also expects to suffer from its “exposure” to the “softer” UK market, where it saw revenue fall by 4.6 per cent to £103m.
The firm also blamed its falling revenue “primarily” for the US government shutdown at the end of last year, and the impact of tariffs.
“Government revenues were lost while staffing had to be maintained due to uncertainty of the timing on the restart of funding and work,” the company said.
But stock broker Panmure Liberum said the firm’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.
The company’s consulting arm saw the biggest dip in revenue last year – down 19 per cent to £32m – while revenue in its media operations jumped 12 per cent to £25m.
Turnaround in offing after boss quits
M&C Saatchi’s falling profit comes in a choppy period for the company, after Al-Qassab quit last month after less than two years at the helm.
The firm is battling to boost its market valuation in the face of reported unrest on its board.
Activist investor Harwood Capital, which owns 6 per cent of the company, is said to be pushing for a piecemeal sale of M&C Saatchi’s various businesses.
The company is valued at £150m, having shed 30 per cent of its value in the last year.
Dame Heather Rabbatts has stepped up from non-executive chair to lead the firm while it searches for a successor to Al-Qassab.
She told City AM the firm was doubling down on a push into providing advertising and public relations services for defence firms in a bid to return to growth in 2026.
“Defence and security work, together with… deploying AI and tools, will drive the performance and the growth of our business,” she said.
M&C Saatchi was founded by Maurice and Charles Saatchi in 1995, after the brothers were ousted from Saatchi & Saatchi – the agency they had set up.
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