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  • Writer's pictureMark Watson-Mitchell

M&C Saatchi – broker says 40% upside in advertising group’s share price

After having fought off takeover bids over the last year, the £228m advertising and marketing group M&C Saatchi (LON:SAA) has defined its ‘Moving Forward’ strategy to deliver growth in its profits over the next couple of years.

Analyst Ciaran Donnelly, at the company’s brokers Liberum Capital, has upped his Target Price on the group’s shares to 260p.

They closed last night at 186p after trebled dealing volume in the shares following a Capital Markets Day event for investors.

Established in 1995, the London-based M&C Saatchi group provides advertising and marketing services in the UK, Europe, the Middle East, Africa, Asia, Australia, and the Americas.

It offers its services in the areas of media and performance, advertising and CRM, sponsorship, branding, and global and social issues.

Last year it defeated takeover bids from NextFifteen and Advanced Advt.

Ahead of the group announcing its 2022 results on Thursday 23rd March, Donnelly is estimating that the year will have seen revenues rise from £249m to £271m, with pre-tax profits having risen from £27.3m to £31.8m, generating earnings of 15.2p (10.0p) and enabling a return to dividend payments of 2.5p per share.

For the current year he is already going for £284m sales, £38.0m profits, 20.2p earnings and a 3.8p dividend.

The year to end December 2024 he forecasts could see £298m takings, creating £42.8m profits, with 24.7p of earnings and a 4.1p dividend.

Liberum Capital sees a 40% upside in the group’s share price as the new strategy shows through.


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