April 20 (Reuters) - British advertising group M&C Saatchi warned on Monday that the Middle East conflict is likely to significantly impact its sport, entertainment and consumer-facing business, while
UK's M&C Saatchi flags Iran war hit to sports business after profit drops 75%
M&C Saatchi Faces Major Setbacks Amid Middle East Turmoil
April 20 (Reuters) - M&C Saatchi warned on Monday that the Iran war would significantly hurt parts of its business, after pretax profit at the British marketing group dropped by nearly three-quarters last year.
Impact of Iran War on Business Operations
The Iran war has upended travel in the Middle East and caused the cancellation or postponement of events including Formula One and tennis, hitting the company's sport and entertainment business that drives campaigns for global brands and works with athletes on commercial partnerships, and its consumer-facing advertising division.
Middle East Expansion and Revenue Contribution
M&C Saatchi had expanded its Middle East business in recent years, betting on the United Arab Emirates' rapidly growing market. The region accounted for about 6% of group revenue last year.
Company Outlook and Leadership Changes
Confidence in Future Performance
CONFIDENT IN OUTLOOK
"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," Chairperson Heather Rabbatts said in a statement.
Leadership Transition
Rabbatts took on the executive chair role after CEO Zaid Al‑Qassab stepped down last month. The company is still in the process of appointing his successor.
Analyst Perspectives
Analysts at Berenberg said the confidence in the 2026 outlook was reassuring, noting M&C Saatchi’s exposure to higher-margin government-related work and more resilient specialisms such as its media division and "Issues", which handles climate, health, defence, and human rights communications.
Financial Performance and Restructuring
Profit Decline and Contributing Factors
Pre-tax profit sank 75% in 2025 to 4.6 million pounds, hit by restructuring costs and weak performance in the UK and Australia.
Business Restructuring and Market Conditions
The company, which also offers public relations and digital media services, has struggled with a drop in client spending and delayed contract signings, prompting a business restructuring.
M&C Saatchi said first-quarter trading was in line with its expectations despite the tough economic conditions.
Market Reaction
Shares in the company, which have lost 28% of their value over the last year, were around 1% lower by 0913 GMT.
($1 = 0.7414 pounds)
(Reporting by Nithyashree R B in Bengaluru; Writing by Yadarisa Shabong; Editing by Subhranshu Sahu, Kirsten Donovan)
