Advertising firm M&C Saatchi has warned that the conflict in the Middle East is likely to “significantly impact” its sport and entertainment operations.
The London firm, founded by brothers Maurice and Charles Saatchi, saw shares edge lower in early trading, with shares sitting close to a five-year low.
The group also held off from handing shareholders a dividend as it battles “tough” macroeconomic conditions.
M&C Saatchi has expanded its operations in the Middle East in recent years, growing to cover around 6% of group revenues.
“The conflict in the Middle East is likely to significantly impact our sport and entertainment and consumer-facing business,” the company said.
Nevertheless, the company said operating profits are still expected to improve and are in line with market estimates, with changes to the cost base helping to address “ongoing volatility”.
The company has been cutting costs significantly in recent years, with its global efficiency and restructuring programme securing £7 million in savings in 2025.
On Monday, M&C Saatchi reported that pre-tax profits slid by almost three quarters, 74.6%, to £4.6 million for last year amid challenging conditions.
It reported that revenues fell by 12.1% to £347.4 million in 2025, compared with the previous year.
Dame Heather Rabbatts, executive chair of M&C Saatchi, said: “Our 2025 financial performance was impacted by the tough market context and the board is clear on the action that the business needs to take; our focus will be to simplify the businesses, to refine our go-to-market offer and to unlock the intrinsic value of the company.
“Whilst we expect continued market uncertainty, we are confident in targeting net revenue growth and operating profit growth in 2026, in line with current market expectations.
“With a unique market position, a deep understanding of our clients’ business, broad expertise across both government and commercial sectors and specialised data-driven systems, the board believes that the company is well-positioned to create value for shareholders.”
