Advertising revenues surge at M&C Saachi

M&C Saachi shrugged off worries in the marketing industry yesterday as the advertising group's half-year revenues surged by 15 per cent on a like-for-like basis to £82.8m.

David Kershaw, the chief executive, said M&C was benefiting from the "micro" effect of winning new business, including public relations for Twitter and Spotify and customer relationship management for O2.

The group is also seeing strong demand for mobile marketing and got a boost during the Olympics from clients such as Coca-Cola and Transport for London.

Mr Kershaw said M&C's fortunes contrasted with the "macro" picture in the UK.

"You can't see the market overall growing by more than 2 per cent or 3 per cent," he said. "So for us growing by 15 per cent is hugely encouraging."

Its research arm, Clear, was the weak performer as clients look for an immediate return on investment, rather than spending on research which might only pay off in a year or two.

"Marketing directors who are no doubt under pressure are being more choosy about investing in the short term, rather than the medium term," Mr Kershaw added.

Pre-tax profits before exceptionals jumped by 13 per cent to £8.7m, although the group took a £2m accounting hit as the value of share options rose. M&C's shares fell 3p to 157p but are up 35 per cent this year.

M&C has a £14 m cash pile, prompting Fiona Orford-Williams, an analyst at Edison Investment Research, to suggest the group could go on the acquisition trail.

But Mr Kershaw, describing the group as a "federation of entrepreneurs", said: "We prefer starting businesses to paying large amounts of money and racking up debt."