M&C Saatchi PLC (AIM:SAA) shares fell 6% after the advertising group warned that it expects LFL revenue to fall by mid-single digits this year.
This is based on "continuing macro headwinds as well as the significant drag of the Australian business", despite a improving momentum in its pipeline of opportunities.
CEO Zaid Al-Qassab says: "After a solid start to the year, we have not been immune to the market conditions of the wider industry, as clients reacted cautiously to the geopolitical tensions and the unstable macro-economic environment.
"This particularly impacted our Australian business, which subsequently had an adverse effect on the group's first half results."
Group revenues were down 5.1% to £103.8 million and operating profit 36% to £10.3 million.
Excluding Australia, revenues would have been "broadly flat", he says, with positive momentum seen in "growth engines" of its Issues, Media, Europe and the Middle East segments all growing in the first half.
We acted quickly to accelerate transformation cost savings in order to maintain our investment in higher margin growth areas.
"Looking ahead, while we expect continued macro uncertainty in the second half, we will focus on what is in our control, aiming to deliver on the improving pipeline momentum.
"In the medium term, we continue to improve our operating model, and the strength and diversity of our portfolio, meaning we are well-positioned to deliver on our growth ambitions and to create value for shareholders."
Analysts at Peel Hunt said that after a good start to the year, trading "took a turn" in Q2, in particular within the Australian business.
Australia was the "problem child", with a higher number of consumer-focused clients, which have been spending cautiously.