A group pulling in two directions

M&C Saatchi, the London-based Advertising and communications group, reports its Business through five like-for-like specialisms plus a regional split. (LSE:SAA) Its interim results for the six months to 30 June 2026, published on 22 September, show those units heading in noticeably different directions. Like-for-like net Revenue fell 1.4% to £86.2m, but that modest group decline combines double-digit percentage falls in two specialisms with high single-digit growth in two others.

No new regulatory announcement from the company has appeared since the interim results, so this piece uses the 22 September figures, read in full on the London Stock Exchange, to examine where growth is coming from.

The growing units: Issues and Media

Issues, which the company describes as a data and technology-led business working largely with government and public-sector clients, grew like-for-like net revenue 9.3% to £30.0m and now represents 35% of the group, up from 31%. (LSE:SAA) All of its results are booked in the UK. Media, the data-led performance media specialism, rose 9.9% to £11.7m, lifting its share to 14% from 12%, supported by client wins in the US, UK and Asia-Pacific.

On our calculation, these two units together added about £3.6m of net revenue year on year.

The shrinking units: Passions & PR and Consulting

Passions & PR fell 16.4% to £12.7m. (LSE:SAA) The company linked this mainly to weakness in sport and entertainment in the UAE, where the Middle East conflict led to event cancellations, plus softer experiential spending by alcohol brands in the US and UK. Consulting dropped 16.1% to £8.3m as branding and design projects were deferred. Together, on our arithmetic, these units lost about £4.1m of net revenue, more than offsetting the gains above.

Advertising slipped 3.1% to £23.5m. (LSE:SAA) Excluding the UAE, however, the company said advertising net revenue grew by more than 7%.

Profit tells a different story

The profit picture partly inverts the revenue trend. The Non-Advertising specialisms, which contribute 73% of net revenue, saw like-for-like operating profit fall 22.7% to £9.9m, with Margin down 4.5 percentage points to 15.8%. The company attributed this to revenue declines in higher-margin Consulting and Passions & PR, alongside Investment in Issues capability and in scaling Media. Advertising operating profit rose 38.5% to £1.8m, a 7.7% margin, helped by cost control and the exit from low-margin work in Australia.

Regionally, the UK grew 5.9% to £52.6m, the Americas fell 8.7% and Europe and the Middle East dropped 19.4%, while Asia-Pacific was flat. Group central costs rose to £5.6m from £5.1m, which the company linked to currency movements, mainly the US dollar, and legal and tax fees. Statutory operating profit was £1.3m against £7.0m, reflecting one-off items including restructuring, and the statutory result was a £0.2m loss before tax.

What management expects

Management targets full-year like-for-like growth in both net revenue and operating profit, in line with market expectations, with a heavier second-half weighting. Issues is expected to benefit from a weak comparison, as the prior-year fourth quarter was hit by the US government shutdown. Media is expected to keep growing, while the Middle East is expected to remain a significant drag on Passions & PR and Advertising. These are company targets, not reported results.

On our reading, the group's direction increasingly depends on Issues and Media continuing to compound while the discretionary, events-led units stabilise.

Risks and what to watch

Risks include reliance on government-related work in Issues, exposure to client caution in consumer sectors, continuing Middle East disruption, and execution of simplification plans after the Australia and New Zealand management buyout stopped progressing. Dame Heather Rabbatts remains executive chair.

No date for the full-year 2026 results has yet been announced in the material reviewed. The shares closed the 3 November session at 117.0p, based on LSE delayed data.