M&C Saatchi’s financial travails continue: now the quoted agency group’s shares are to be suspended after it missed a deadline to file its latest accounts following the discovery of an £11.6m accounting black hole last year.
The agency has produced some unaudited figures showing revenue to December 2019 was up 2.4% to £256m.
The agency’s auditor Peel Hunt says: “The company shares will be suspended from tomorrow as it misses its filing deadline. The unaudited numbers offer some consolation, and comments on current trading suggest resilience in the face of the pandemic. Net cash (£56m) is similarly reassuring. But a sensible estimate of value for this company feels some way off.”
CEO David Kershaw says: “The past 12 months have been hugely challenging for the Company and its shareholders. I would like to personally thank all of our people for their dedication, commitment and hard work during this time, particularly since the onset of the Covid-19 pandemic. This is reflected by our resilient performance so far in 2020.
“Since the accounting misstatements first came to light last year, we have worked tirelessly to ensure we never find ourselves in this position again. We have strengthened our finance team, set about transforming our financial controls, and rebuilt our Board with the appointment of four independent Non-Executive Directors.”
M&C hit trouble when its previous auditors discovered it had declared revenue before it was actually due, similar to the scandal that rocked Tesco in the early days of Dave Lewis’ reign. Lewis acted swiftly to remedy matters which pre-dated him but there was a court case and Tesco made a large financial settlement.
So M&C isn’t out of the woods yet. Co-founder Maurice Saatchi resigned over the affair along with three non-executive directors. With its shares suspended it will be unable to raise money from shareholders through a rights issue but the £56m it has accumulated should see it through in the short to medium term.