Saw mixed improvement. The high-margin, non-advertising specialisms are now two-thirds of our business. We also saw margin improvement in advertising. Our transformation program is working. 85 % of our in-scope revenue is now operating through the shared service centre in Cape Town. That enabled us to deliver our stated target of GBP 10 million of annualized cost savings, mainly through that back-office consolidation. I'm happy to say we've extended that to another GBP 3 million of annualized savings targeted for 2025, which will be mainly through middle-office activities. This success is based on three essential factors: our brilliant people, extraordinary creativity, and amazing client service. Our investment in people is paying off, with employee satisfaction and with client wins. You can see a small selection of those client logos here on this chart. Our creativity continues to win awards, including the much-coveted Cannes Lions Awards.
Our client service has been strong, as evidenced by retention of clients in 2024, who accounted for 92% of 2023 revenue. That's a very healthy number. Overall, we're in a good place, with solid foundations both to succeed in a volatile geopolitical world and to build stronger growth over the medium term. For more detail on these numbers, I'm now going to hand you over to Simon.
Thank you, Zaid. Good morning, everyone. We're pleased you could join us, whether in the room or online. Zaid's already summarised: 2024 was a strong and resilient year of business performance, set against a backdrop of considerable organizational change and macro volatility. In this first section of my update, I'm going to talk to you about the context and color to these results, and then we'll shift our attention to the future development of M+C Saatchi. As my first chart demonstrates, 2024 saw progress on every one of our key financial metrics. Like-for-like net revenue of GBP 231 million grew by 3.7%, or GBP 8.2 million. That was fueled by higher-margin, non-advertising specialisms. We've got a truly global business, and this was shown in strong results in our Issues and Media businesses.
Operating profit of GBP 35.2 million grew ahead of sales, and that benefited from a combination of self-help cost actions alongside improved margin mix. The success of our global efficiency program, which has centralized back-office activities, has underpinned half two investment in the business, principally in people. That enabled us to reinforce creativity, develop our regional-first strategy, deliver our digital and data capabilities, and broaden our geographical offering. Even with this organic investment, we were able to improve our operating margin, which was up 20 basis points. Earnings growth was up 6.1% like-for-like to 17.6P, and it outstripped PBT growth, supported by another successful year of cash-settling put options. This takes us to GBP 24 million of successfully resolved put options over the past two years. That is just now GBP 3.7 million outstanding.
Despite the GBP 8.6 million of in-year put option settlements, adjusted net cash grew by 84% to GBP 15.3 million. That, set alongside our facility, gives us the firepower to successfully execute our strategy. Finally, on this overall view of performance, we saw strong growth in our proposed final dividend, up to GBP 1.95, which also maintains cover. As with the presentation of our half-year results, we have included bridges for both absolute revenue and profit development. That helps us to highlight like-for-like performance and the quantified impact of adjustments in order that you can reconcile back to statutory results. Most materially for revenue, these adjustments comprise the removal of our discontinued business in South Africa, which is now a licensee, alongside some smaller disposals and the impact of FX. This like-for-like analysis enables us to focus in on the key business drivers.
I'll explain those in more detail in a moment. In summary, our 2024 growth was driven by three regions, which are the Middle East, Europe, and the U.K., and two specialisms, which are Issues and Media. That's a comparable overall shape to what we presented in the first half, although we did see some softening of advertising conditions in half two. As Zaid will further develop later on in the presentation, our go-to-market position and approach is regional-first, powered by specialisms, because this is how we best address the needs of our clients. It does enable us to provide truly integrated solutions. As this slide shows, three of our five regions were in growth across the full year, with a standout performance in our Middle Eastern business, a region that's broadly doubled in size since 2022, and which we are confident will continue to thrive.
The U.K. is our largest region. It accounts for about 47% of group revenues, and it includes our fast-growing global Issues business. The U.K. advertising conditions, as I've already mentioned, remained challenging. APAC was our most significantly macro-impacted region, and that was due in part to the size of our Australian business, where we did experience client spend reductions in consumer-driven industries such as retail and telecoms. In the U.S., advertising was up, with a strong performance in financial services. However, client delays and project deferrals in consulting, which is really a consequence of macro uncertainty, was a drag. Finally, on this slide, our two smallest regions, Europe and the Middle East, both saw strong growth in existing client spend as well as new business momentum.
These will continue to be medium-term opportunities for the group, including as we broaden our range of services that we offer in those geographies. For example, in half two, we launched a sports and entertainment offer in the UAE. As you'll recall then, we also present the M+C Saatchi business by specialism, or capability, you might call it, and that provides further insight on performance. This view helps us to understand the continued strength of our global Issues business, whose strategic solutions are so relevant in the current context of their mainly public sector clients. Revenue was up 27.6% to GBP 57.9 million. Furthermore, we're focusing that division on new business activity and further broadening our addressable client base. Passions and PR has been a year of change. We integrated PR into that business.
has been new global leadership under Robin Clarke from Q4, and we have seen some rationalization of our client portfolio in order that we might optimize margins and profitability. We saw like-for-like revenue correspondingly down 6.5%. I have already noted the consulting trends, but to move on to the media specialism, we have seen improved momentum and recent wins in Southeast Asia, the U.S., and the Middle East. We are encouraged by the developing pipeline in this part of our business, and we continue to see this as an important part of our offer. Finally, advertising, which is about one-third of our revenue, experienced tougher macro conditions, for example, in Australia, where interest rates have remained stubbornly high, and in the U.K., but that was partly offset by strong growth in the Middle East and in Europe.
The next slide really charts out the evolution of headline margin that is not adjusted for discontinued operations or for FX. It really pulls out two key points that I'd like to describe. Firstly, the total group margin has shown considerable recent progress on the back of the transformation. We've driven global efficiency, and we've also exited loss-making or marginal businesses, and that's allowed us to focus in on geographies where we truly believe we can be long-term winners. The second point I'd like to make is the structurally higher margins we make in non-advertising specialisms. You can see it on the chart, but in 2024, we achieved 25% margin in non-advertising specialisms compared to 11.6% in advertising. That demonstrates the expected ongoing benefits of a broader offer, an integrated set of solutions for our clients that draws on all of our capabilities.
We expect those trends to continue into 2025 and beyond. This further bridge slide shows the steps between statutory and like-for-like performance, this time in operating profit, and it charts an underlying GBP 1.8 million, or 5.2%, improvement, having stripped out the one-off costs of restructuring or non-core items. Key to that progress has been a few things, some of which I've already touched on: revenue growth, revenue mix, and the completed efficiency program, which has delivered GBP 10 million of annualized savings by the end of 2024. Now, very importantly, and Zaid's already made slight reference to this, but we'll build it out a little bit more. Very importantly, that's allowed us to invest in the business, particularly in half two.
It's allowed us to improve our creative offer, develop our regional team capabilities, particularly in the U.S. and the U.K., and focus in on our business development engine so that we can invest in future growth. The cash generation of the business remained strong in 2024, with a net increase of GBP 7 million, or 84%, and that was despite having cash-settled put options of GBP 8.6 million. I noted earlier that the put option liability now stands at GBP 3.7 million outstanding. That's about one-tenth of where we were just 24 months ago. What was a material cash headwind is now turning into a cash tailwind. We remain confident in an ongoing targeted conversion of at least 80% of operating profit into operating cash, and we achieved 85% in 2024.
There are ongoing commercial opportunities to further improve working capital, for example, through optimizing our supplier terms, and there will be increased benefits of a focus on cash management across the group, which includes cash targets to the broader management population. To conclude this financial review section, just to look at outlook and evolution of our operating model, we expect FY 2025 to be in line with market expectations, and we expect it to be a continuation of the broader trends that we've experienced in 2024, albeit we recognize the ongoing global uncertainty. We'll continue to invest organically in growth opportunities such as Issues and Media and the Middle East, and we'll broaden our portfolio and continue to shift to that higher margin mix that I've mentioned. We do also have flexibility in our plans to adjust to macro volatility and market conditions should that need arise.
The next section, which is slightly shorter, is just to focus on our ongoing work to build an operating model that supports our medium-term growth aspirations. The recent transformation of the M+C Saatchi business through significant structural change has really established a strong bedrock upon which to build in the future. 2024 continued the strong progress that we made in 2023, and it successfully rationalized our portfolio, delivered that efficiency program I've mentioned, and reduced our minorities to just over 3%. I've mentioned that's a fraction of where it was. That really gives us the right structural shape for the business for the future. 2025 has already seen the commencement of a smaller efficiency program, an incremental GBP 3 million targeted, annualized, and that will conclude the work on our back office, but it will also shift attention to middle office areas like production, business intelligence, and data.
The further progress that we've made with our operating model then really does give us a harmonized, centralized, integrated set of capabilities to serve a global business. Not only does this give us a step change in business efficiency, enabling us to repurpose cost to where it matters most for clients, which is front-facing activities to develop our business, but it also aligns with our effectiveness objectives so that we can free up our people to be brilliantly creative and deliver excellent customer and client service. That's all organized, as you can see at the point of the pyramid, around our cultural power go-to-market proposition that Zaid will speak about more shortly. All of these plans are underpinned by a clear capital allocation framework, which prioritizes organic reinvestment, and that's because it has a greater speed of execution and a lower intrinsic risk profile.
We have M&A to expand our profitability and geographical coverage. Additionally, in terms of priorities, we will focus on returns to shareholders through a growing dividend, focus on TSR, and ongoing share buyback if that is considered to be appropriate. At the right-hand side of the slide, we have some of the strong inherent enablers supporting that framework. We have low capital outgoings, robust operating cash generation, and balance sheet strength and flexibility with the firepower to execute change and deliver our strategy. Finally, my penultimate slide gives a little bit more color on how we focus on areas of investment for growth. How do we prioritize our investment both organically and in terms of M&A? What are the key criteria? This is what is laid out on this slide.
On organic priorities, this evolves around investing in our brilliant people, delivering extraordinary creativity and amazing client service, and we start from a strong position, but there's always more we can do as we evolve our offer to latest needs of clients. We'll look selectively at bolt-on M&A, and when we do, we'll look at cultural fit to ensure successful integration. We'll look at financial fit to ensure profitable growth. We'll look at strategic fit, building capability, and then we'll look at operational fit, linking to a global operating model, as I've mentioned. In future updates, we'll continue to expand on our developing thinking here as we focus on the areas that we have a right to win.
Our medium-term aspiration is sustainable, profitable growth, and the early steps on this staircase are now well progressed, improving the structural shape of the business, improving our margins, and delivering increasingly global capabilities. This takes us to what we've described then as the golden staircase, which we believe will not only enable our medium-term growth aspirations, but will also result in modest ongoing expansion in our operating margins. That is where I'll hand back across to Zaid to share our strategic vision and opportunity ahead of us. Thanks very much for listening.
Thank you very much, Simon. I'm going to add a little insight into how we're thinking about that strategic opportunity that Simon's described. As you've heard, we've nicknamed that the golden staircase, forgive me, but we are a marketing company.
I'll explain in turn what we mean by those strategic opportunities, which we call selling in, up and across, portfolio management, and investment for growth. Our operating model is based on satisfying client needs, and that enables revenue generation from three sources. Firstly, from new client wins. Clients come to us for our world-famous brand, award-winning creativity, high-quality people, enabling data, and integrated model. We've sharpened that approach with the introduction globally of HubSpot, our lead generation and customer pipeline tool. Secondly, clients stay with us because our client understanding, products, and services enable us to offer them more. That activity has been improved through the introduction of the intelligence insight team to help identify business insights, and it'll be further enhanced by our new AI tool, the Cultural Power Index.
Thirdly, the new regional-first operating model enables clients to access a wider range of services, which were previously isolated in different parts of the group. That is all backed up by changes we have made to the incentive and reward structure for all of our senior staff and a good number of our more junior staff, which is based on the success of their total region. This model is not just a theory. It works in practice. It has worked long-term on CommBank, which under our partnership has risen to become the most valuable brand in Australia. We serve CommBank with advertising, and with consulting, and with passions and PR capabilities. Sometimes we do that all at once, as we did with the new launch of their travel app, which was only last month.
It is also working on much more recent clients like Allwyn, which we won in 2024, and for which we are delivering fully integrated global communication plans. That is because it is built on an understanding of client needs and how marketing has evolved in the modern world. Could you click on a slide for me, please? Thank you. The plethora of different capabilities that are needed nowadays has led to clients struggling to manage the complexity. Here are just a selection of the many different client requirements. The second step on our golden staircase is the way we use our portfolio to meet those client needs. At M+C Saatchi, we cut through that complexity in simple ways by putting the right team together from our specialisms: Consulting, Advertising, Passions and PR, and Media to seamlessly serve those clients with those needs.
Worth noting, our Issues specialism provides that whole end-to-end service, but does it for the public sector. That is all underpinned by the back office, the middle office, the data spine, and our product set. This portfolio approach has inherent strengths, both in terms of resilience, for example, the countercyclical nature of some of the activities in our Issues specialism, and in terms of mix, because we're well positioned to take advantage of the market evolution, which is towards those higher mix specialisms. The third step of our golden staircase is our targeted investment for growth. In terms of our capital allocation priorities, which are organic investment, you'll be unsurprised, I hope, to hear that it's focused on the three areas of strengths that I've talked about underpinning our model.
The brilliant people, where our focus has been on investment in creative talent, the extraordinary creativity we serve clients with, which we've backed up with data and technology, and that amazing service, which has benefited from, for example, improved levels of securitization, which enables us to win more public sector business. When I stood here for the first half results, I expressed an intent to invest in the fastest growth or the highest opportunity areas of our business. That is exactly what we've done since by launching M+C Saatchi Sport & Entertainment in the Middle East. We've already expanded our existing relationship with Adidas into that region, as well as broadening to other clients. That is just one example of what we mean when we talk about broadening our regional offerings.
As I mentioned, the investment into securitization, as well as personnel, is a deliberate, foresighted approach to enable the continued growth of our Issues business. It is illustrated here. It continues its strong trajectory, and those investments enable it to broaden both its offering and its client base. As previously communicated, our investment approach also includes selective bolt-on acquisitions, using a strategic approach which evaluates the region, the specialism, and the industry focus of potential targets. We have a very robust set of criteria, and we overlay that with a lens of our particular right to win. Above all, let's not forget that this is a creative solutions business. That cross-sell, portfolio strength, and investment choices, they all take place in that context, and that is how we ensure that we deliver profitable growth.
In my first year as CEO, I've made it my business to meet clients and potential clients face-to-face on a weekly basis in order to understand their evolving needs and the role that we as M+C Saatchi play. They've told me that the landscape has become extremely complex, and therefore brands are struggling to cut through to their consumer base. The brand winners are those who are able to identify the customer topics that they really care about, and to harness those, which at M+C Saatchi, we call using cultural power. We have renewed our client proposition around that approach. I'm going to play you a short video to explain some of that and to also introduce you to the particular product proposition, the Cultural Power Index. What you've just seen is based on modern marketing understanding that brands who know how to leverage culture outpace their competition.
With over a billion ad blockers downloaded to date, the world has changed from a time when you could just push your brand into people's faces and expect to be rewarded. Culturally relevant brands grow six times faster than those who are not because they engage with consumers on their own terms. That is typically in social media, and it is most often on mobile. In our Cultural Power Index, we have our own IP, an AI-powered diagnostic tool which helps sell our services, but a product which helps clients to track and to improve their brands. Now, it is pretty hard to summarize a formula which is based on literally billions of data points, but our proprietary AI model proves that there are four database levers to brand growth.
For each of these, we have a dataset to track and evaluate brands against their competition tied back to brand and business growth. These levers relate to core services that we are well placed to provide, and that sets us up for further growth with those clients. You could say it is a perfect mix of science and art, which is very much the sweet spot for us here at M+C Saatchi. That is a good place to wrap up. Before I take questions, I am going to just pause and summarize for you. In a world with an uncertain macro picture, our approach is about building sustainable profitability and resilience, and frankly, controlling the things that we can control. We do that through selling best-in-class creative solutions. That is underpinned by a strategy that we have called the Golden Staircase and by an efficient and effective go-to-market approach.
This growth model, which is margin accretive and strongly cash generative, as you've seen, is designed to deliver shareholder returns and satisfied clients. On that note, I'm going to open up for questions and invite Simon to join me.
Morning, everyone. It's Jessica Pok from Peel Hunt, and we've got three, please. The first one, could you just talk a little bit? I mean, you've talked about for the new year, you're looking to meet market expectations, but just general sentiments on clients, client spend for the year. Obviously, we've had a lot of macro uncertainty so far, just a general view on that. The second is on the second leap of our second step of efficiencies in the middle office. Can you talk about what that involves? I mean, for the back office efficiencies, a lot of things have been moved into South Africa.
Just what does that involve for the year? The final one, talked about some of the AI capabilities within the group. I mean, some of your peers are showing a lot of using a lot of AI for the actual creative work itself. It would be good to know what your client's thinking about these new solutions, what do you think about the pricing going forward, and also just where M+C Saatchi sits within the landscape.
Good morning, Jess. That seems like three questions in one. Look, we certainly live in a pretty volatile geopolitical world right now. I'm not a political commentator, and I don't have a crystal ball, and I probably wouldn't be sitting here doing this if I did.
Our view is we can control some controllables, we can do a good job of our own operations, which I think you've seen in the results with the GBP 10 million annualized cost savings and our own transformation. We can do a really good job of our own client service and winning clients, and we can do a really good job of creativity, which is our core service and product, and we've been doing that. We believe that by doing that, we can continue to grow, and our forecast is that we can do that in line with expectations. I can't control what's going on around us, but I can control what we do really well. The AI question, I mean, obviously, our approach has always been that AI is a tool.
We are not going to turn ourselves into a technology company, and we would not be able to compete with Google and Meta anyway, right? That would be ridiculous. Our ability to adopt those tools and to use those tools is incredibly important to our business. That is the approach we take. There are places, as you have seen with the Cultural Power Index, where we can add our own proprietary layer to data and to develop tools, and that is the appropriate way for us to do that, that is in service of our clients.
You had a third question, which is efficiency. I mean, our program of back office is drawing towards its conclusion, and will conclude in the first quarter, first half of this year. We have moved already onto middle office. You saw a little bit of that in what I have said about insight and intelligence.
There'll be more of that because one of the areas is data and insight. The other major area that we're looking at is production, where unifying production and having more of that ability to turn that around in-house, retain revenue, and do that fast is an important middle office capability for clients.
Thank you. Good morning . My three. First of all, I mean, you've talked about enhancing the team and putting in regional CEOs and leaders. Is your dream team now all in place? That's the first one. The second one is about U.K. advertising, obviously had a really tough H2, and also you mentioned Australia being a difficult market. Has there been any amelioration into the new year, and what does the landscape look like? More broadly, this is the third one, is on the new business environment.
What's the pipeline looking like? Review situation and any change in what people are looking for? Thank you.
On dream team, we've made a number of important hires. There are a couple of positions that we're still looking at that we're out in market hiring for, again, strengthening creative leadership and strategic leadership, but it's drawing to a close of putting that new team in place. I mean, outlook, my answer is the same, really. I don't have a crystal ball any more than you do. Australia is a troubled economic environment. I mean, they've just had their first interest rate cut for five years, so it's lagging the rest of the world. I would say that it continues. I'd expect that to continue to be tough.
Other than that, I think we feel that we can deliver on our expectations to grow broadly across all of our business and broadly across all of our other regions. In terms of new business, we're pretty confident from a pipeline point of view.
Morning. It's Roddy Davidson from Singers . Thanks for the presentation. A few questions have been skittled down already, but a couple of things I wanted to ask about, please. Firstly, 85% cash conversion, which is excellent. What do you think is a sort of normalised level potentially for the business going forward? Also, given the contribution that makes to the overall transformation of the financial position of the business, could you talk a little about the availability of acquisitions? The availability, firstly, of assets that meet your M&A checklist, and of course, crucially, the sort of multiples that those are going on.
Just secondly, and I guess this relates to what's been asked already, in terms of client retention, do you have a sort of benchmark figure in place in terms of what you'd like to achieve on that?
Yeah. In terms of cash conversion, first of all, I mean, we've got an ongoing target of at least 80% conversion. We achieved higher than that in the first half. As you might remember, it was almost 100% in the high 90s. Across the full year in the mid-80s, we're confident we can continue to deliver that. We've got very, very low capital outgoings as a business. It's about 1% of revenue. We've got lots of opportunity to further enhance our working capital performance. I mentioned it through looking at our supplier arrangements, through understanding our working capital cycles in each and every area of the business.
For the first time, we've got an incentive program across the business that is focused on cash conversion. All of the senior leadership team and the executive team have a focus on this metric, and that, I think, will hone us further in terms of opportunity into the future. I mean, in terms of availability of acquisitions, it remains, as you know, a fairly fragmented market at the smaller end of marketing services, and therefore, there are a number of business opportunities out there. What we've been doing over recent months is sort of scanning that, considering what is the sort of evolution of our business and our strategy. There's nothing to share and report at this stage, but it's definitely an ongoing consideration, and there are things out there that could accelerate our strategy or broaden our geographical offering. That's definitely the case.
In terms of client retention, what we'd like to achieve, that is a very core strength of the business. Zaid mentioned the 92% statistic, which shows you how well we have been able to retain clients through excellent customer service or client service. We would look to continue to deliver those very, very high levels and then build on top of that a greater new business engine. I think we're in a good place. There's no room for complacency, but I think we're in a good place, and that's on the back of the good work we do for our clients.
Yeah. Thanks. It's Ciarán Donnelly from Berenberg. Two for myself. I guess just in terms of issues, clearly another great year of growth. Zaid, you talked about kind of the continued geopolitical uncertainty.
I guess that's probably a tailwind for the business, but I guess the converse is probably, let's say, budget tightening across some Western governments. Could you just talk about those two factors and how it supports that business? Secondly, you've obviously done a bit of work in terms of the portfolio more generally in the 12 months since you've been in situ. I guess, have you completed that work, or is there potentially more to come in terms of some of the X-ing of, let's say, smaller or less relevant businesses going forward? Thanks.
Yes. I mean, look, no one enjoys geopolitical uncertainty, but you can see in the results of the Issues business that serving the public sector with communications at this time can provide us with some countercyclical aspects to our portfolio. That's a good point of extra resilience for us.
We do see that at the moment continuing. You asked specifically about budget tightening. I mean, we tend to provide pretty essential communication services in areas like defense and diplomacy. We have had no manifestation of budget tightening, nor any conversations about such a thing on that business to date. None of us have a crystal ball, but we've had none. Our portfolio approach is always under review. The substantive exits have been done. There are a few smaller, less strategic businesses that we're still evaluating. It does not mean necessarily there will be exits, but we, as you know, are trying to focus our firepower on places where we believe we have a right to win. We will complete that work and then decide.
Good morning. It is Jonathan Barrett from Panmure. I have got two questions. First one is a relatively simple question just on new business conversion rates.
Just tell us what sort of your pitch win rate is. How's the new business coming to you now? Has there been a change in the flavour of that, and what you're getting to on that metric? Secondly, just moving on to the Cultural Power Index, perhaps you could just walk us through from a practical perspective about this product. Is this something I come and buy off you on a standalone basis? Do I need to take a range of integrated products from you for you to give this to me? Are you selling it all the way around the world? How does all that sort of practical stuff work?
Look, on new business conversion rates, we don't disclose that, but you can see from the business we've been winning that we're doing a good job of conversion. We don't disclose a specific rate.
I do think it can be misleading because I think the question is whether you're winning big and profitable businesses, not how many businesses you're winning. I do think that such metrics are a little bit ambiguous if you're not looking at revenue. You'll see the retention that we've talked about is a retention based on value. I think that's the most important way of looking at life.
In terms of the Cultural Power Index, we only launched it last week. It has been running in beta. Obviously, that's how you do things in this world. It is both a diagnostic tool that we can use to analyze businesses and win pitches and a product that a brand could buy from us to understand their position versus competition and what levers to pull.
It can, in that sense, work as an ongoing product with clients so that we can, in order to track their business and decide which services are right for them. It has several different aspects. As we progress, I'm sure we'll be able to disclose more about some of those clients.
Okay. Yeah.
Steve Liechti from Deutsche Bank. Yeah. Okay. I'll take three as well then. Thanks. Yeah. I know. I'm greedy. I'll be done by with two. On advertising, I know we've talked about it a bit, but the flip from decent growth in the first half to sort of relatively, let's say, high single-digit decline in the second half. I mean, Australia has been bad for a while, so it's not suddenly got worse, presumably.
Can you just unpack that a bit more to why there's been that change and then how we should be thinking about, again, into fiscal 2025, sort of the trend, given the exit trend there? On issues, I hear what you say about government spend and things like that. Can you just remind us the way that the framework contracts work there and what visibility you really have there? Is there kind of business there until it's not, or is there a contracted visibility that you have? Finally, just on working capital, you've had quite a big outflow in the last couple of years from working capital in the cash flow. You kind of mentioned it as a target. Does that mean it's fair to assume that we can see working capital inflows in fiscal 2025 given the stuff that you're doing?
Any explanation around that, please? Thanks.
Look, on the advertising trends, as we've said, the softening was in Australia and the U.K. towards the end of last year. I think that is a result of the macro environment, also elections, by the way, which caused some hiatus. We tend to see that coming back. We still have a view that we can confidently grow our advertising business. The other thing I'll just say in terms of the half one, half two shape is in 2023, we had a very weak half one, which was some bounce back versus half two. There is a little bit around the two-year shape, which has made half two in 2024 optically look weaker. In terms of Issues, yeah, our Issues business typically works with pretty long-term framework agreements, as they're called.
Framework agreements are not a single contract for a single project. They are, if you like, a right to work with public sector clients, and they typically have very long-term and large budgets associated with them, which we then access with a number of different projects over time, a large number of different projects. Those projects typically have different timings, different decision makers, and therefore, they're pretty robust and resilient in terms of our ability to deliver that business. They are not typically contracts or relationships that give us cause for concern. Contracts and relationships and even framework agreements do renew from time to time, but that's a typical part of business. You've seen we've managed it over the last many years, and we continue to do so. That's simply how they work.
I'll take the working capital. Yeah.
On working capital, we did see a bigger outflow in 2023, which was smaller into 2024, and some of that is on the back of work and focus on that area. I think in the medium term, we would look for that to be at least neutral rather than an outflow. The way that we will achieve that is some of the things I've mentioned. It's a focus on looking at our end-to-end supply chains for all of our work. It is also thinking about how we appropriately incentivize the team around focus on cash conversion. We've got some specific initiatives in place to improve that. Yeah, in the medium term, I think focusing on being at least neutral on working capital is appropriate.
Just on costs.
You really were sore about only having two questions, weren't you?
I've got two questions, actually. No.
Obviously, you're looking to complete your middle office efficiency drive. Once that's complete, will you be able to change the way your front office works as well? Will there be some, perhaps, efficiencies there? Will you be able to structure it differently? Does that add anything in terms of your ability to grow faster? Just walk us through that, please.
Look, all of what we've done so far has been about back office activities so that our front-facing, client-facing activity is where we put our investment and our strength because at the end of the day, that's what we do. We'll continue that philosophy. Does that mean there's no room for front office efficiency? There's always room for looking at those things, and we will.
Over time, the shift of our investment and our costs from back office to front office will continue from a mixed point of view, and we'll look for efficiencies as we do that.
Thank you. Hi. Roddy Davidson again. Cross-selling. An objective also looks like a very significant opportunity for the business. Can you talk about how you're progressing with that? I wonder if there are any sort of direct examples that you could share with us by way of a sort of case study.
Yes. I mean, cross-selling is a huge opportunity for us. Historically, because this business has not been integrated, a lot of those opportunities have gone begging. Benchmarking against the industry, we believe our cross-selling numbers are somewhere in the high single digits in an industry where our competitors have revealed ranges of 40-60%.
It is a very significant opportunity for us. The reorganization into integrated go-to-market, so clients see one integrated team with unified leadership, with unified incentives, is a key step in doing that. Obviously, we only did that last year. We are in the early stages. Early stages are very positive. A number of our pitches and a number of our wins were through integrated propositions and therefore achieved that cross-sell. The signs of that are very encouraging.
Sorry. Could I just ask a sort of adjunct to that? Other than the sort of new business pitches, is it coming through quite strongly, would you say, within current clients?
Yes. That is part of the intent, that our cross-sell opportunities are as big in current clients as they are in new business. One of the enablers to that has been we rolled out HubSpot.
We have got a CRM system now that allows us to look globally at our client base. Before, there just was not appropriate visibility of the different client opportunities, especially for global clients or clients in more than one of our regions. That visibility is there now, and it has got contact databases, and it has got ways we can join up in a sort of systematic way as opposed to relying on human beings picking up phones and so on. We can run systems reports. We can look at all of the work we have done on a particular client. That is a game changer in terms of being able to deliver.
Are we drying up? Tom, are there any questions online? Great. Thank you very much for joining us, everyone. You are welcome to have a drink and a bite and talk to us.
We look forward to connecting with you again soon. Thank you.