Advertising firm M&C Saatchi said on Thursday it expects full year profits to be significantly ahead of expectations despite first half pre tax profits being down 30 percent, lifting its shares 6.8 percent.
The firm said pre-tax profits excluding amortisation for the six months to June 30 fell 30 percent to 2.9 million pounds but revenues were up 8.7 percent to 34.7 million pounds.
We expect profits for the full year to be significantly ahead of our previous expectations. The outlook into 2007 is good, Chief Executive David Kershaw said in a statement.
This has been an encouraging year with the business showing real momentum. We have seen strong organic revenue growth driven by several new business wins and our continued expansion into new markets, he added.
The firm said UK operations had been particularly successful, with revenues up 6.6 percent, comfortably replacing lost revenues from British Airways.
Saatchi had warned in March that the loss of the BA account, which the Saatchi brothers had held for more than 20 years, to Bartle Bogle Hegarty late last year would affect 2006 results.
The firm's shares were trading up 6.8 percent to 107 pence at 0902 GMT.
The Numis media team said Saatchi's pre tax profit was ahead of their estimate of 2.5 million pounds, adding that the shares looked particularly undervalued.
We believe that momentum is building in spite of the BA account loss, the analysts said in a research report.