M&C Saatchi PLC on Monday said the ‘unprecedented’ US government shutdown will ‘materially’ impact prior growth and profitability expectations.
The London-based advertising and communications agency now expects a like-for-like net revenue decline of around 7% in 2025, or 1.5% excluding Australia, with adjusted operating profit of £26 million to £28 million, indicating an operating profit margin of 12.5% to 13.0%, below expectations set out in September.
In September, the company said it expected 2025 LFL revenue will be down around mid-single digits with adjusted operating profit to be in line with £35.2 million in 2024.
M&C Saatchi said trading in the second half of 2025 has been adversely impacted by the ‘unprecedented’ US government shutdown, affecting its Issues specialism, a ‘significant contributor’ to fourth quarter revenue and profit.
‘While there is no impact to the relationship or any ongoing contract agreements or longer-term growth of the business, we do not expect to recover this lost revenue in FY 2025, which will therefore materially impact our prior growth and profitability expectations,’ the company added in a statement.
In response, shares in plunged 13% to 109.40 pence each in London on Monday morning. They had earlier traded as low as 100.50p.
M&C Saatchi said it continues to be ‘confident’ in its medium-term prospects and expects its Issues specialism to return to double-digit growth year-on-year in 2026 given the ‘strength of the long-term relationships, the new business opportunities and our continued successful work with our public sector clients.’
In Australia, the company said it is ‘exploring options to secure growth and shareholder value.’
Despite the impact of macro uncertainty and geopolitical volatility, the firm said it is on track to complete its £12 million annualised cost saving programme.
In addition, M&C Saatchi plans a £5 million share buyback over the next 12 months, with the possibility to either extend the programme or increase its value, reflecting its strong balance sheet.
Earlier this month, M&C Saatchi rejected an ‘unsolicited approach’ for its Performance division from Brave Bison PLC.
Brave Bison had intended to combine M&C Saatchi Performance with its existing performance marketing operations, forming one of the largest independent performance marketing companies outside the US.
But M&C Saatchi said the offer ‘fundamentally undervalues’ the division and does not reflect its future prospects.
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