Shares in M&C Saatchi PLC (AIM:SAA) fell 7% after the advertising group reported half-year profits shrank 45% and with a challenging backdrop gave a "cautious view overall" on the second half.
For the first six months of 2023, net revenues fell 7% to £120.4 million and operating margins declined to 8.3% from 14%, leading to profit before tax tumbling to £8.8 million from £16 million last time.
Net cash more than halved to £15.4 million.
There was a mixed performance across segments, with the Advertising arm down 16% and Media 32% on a like-for-like basis, being the two most impacted by the challenging trading conditions, with "significant slowdown" in technology client spend seen in Media, along with a slower pace of new business wins in Advertising.
Consulting was down 0.7%, while the less cyclical Issues and Passions specialisms grew 22% and 10% respectively.
Management anticipates improved revenue momentum but still expects a small single-digit decline in the second half.
Broker Peel Hunt said: "Even though there is good visibility into the rest of the year, at this stage it is hard to anticipate whether client spend will improve next year."