Advertising agency M&C Saatchi was celebrating a successful first year on the stock market after signing contracts with Halfords and Royal Bank of Scotland.

The company, which floated last July, said a string of new business wins in the UK had given it a boost as it posted an

8.5 per cent rise in pretax profits to £8.1 million in the year to December 31.

A strong performance by its Asia Pacific division was the main driver behind the increase, while the group's US business returned to the black.

M&C Saatchi was set up by Tory co-chairman Lord Maurice Saatchi and his brother Charles in 1995 after a dispute with shareholders of Saatchi & Saatchi, the advertising firm the two brothers created in 1970.

The agency, which previously had a contract with Rover, sounded an upbeat note about the new financial year.

A strong portfolio of new business wins in the UK helped offset decisions by Rover and Matalan to take work in-house in mid-2003.

During the year, contracts were signed with companies including Privilege Insurance, which is part of the Royal Bank of Scotland group, and Halfords. Since the start of the year, M&C Saatchi has also won new business with clients including broadcaster ITV, Mini, Twinings and Ribena.

Operating profits in the UK fell to £ 4.3 million from £5.2 million as the group was hit by the cost of its flotation and investment in its European business. However, profits at that arm were 3.1 per cent higher at an underlying level.