M&C Saatchi prepares for share suspension as it fails to file annual accounts
M&C Saatchi is preparing to see its shares suspended as the advertising giant teeters closer to missing today’s deadline to file its 2019 annual results, marking a tumultuous succession to last year’s accounting scandal at the firm.
The advertising group said an audit into previously disclosed accounting problems had taken longer than expected, and that it wanted to ensure the results had been properly vetted “in the context of the company’s historical accounting misstatements in 2018 and prior years”.
The company has already received a three-month extension on its earnings deadline from the regulator of London’s Alternative Investment Market (Aim).
If M&C does not file its accounts by the end of play today, the company’s shares will be frozen from tomorrow until it publishes its annual results. M&C said in a statement today it expects a fully audited set of results “within a matter of weeks”.
It comes after the £64.9m company was last year rocked by an accounting scandal that saw its share price plunge dramatically, and which led to the departure of its founder, Maurice Saatchi, and three independent directors.
The discovery of a £11.6m accounting error in the company’s accounts in December rattled investors and prompted an investigation into the firm by the Financial Conduct Authority.
Chief executive David Kershaw today said the past 12 months “have been hugely challenging for the company and its shareholders”, and that 2019 was “the unhappiest year in the company’s 25-year history”.
“Since the accounting misstatements first came to light last year, we have worked tirelessly to ensure we never find ourselves in this position again,” he added.
In a preliminary financial statement released today in the place of audited results, M&C said deeper investigation of its accounts had revealed a further £2.4m in misstated profit before tax, bumping up its total accounting error to £14m.
Unaudited headline results for the year ending December 2019 showed net revenue growth of 2.4 per cent year-on-year to £256.4m, while losses before tax widened 37 per cent to £8.6m.
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