M&C Saatchi’s shares have begun trading again on the stock market today following a 10-week suspension, after the agency group announced the publication of its audited accounts.
Shares in the agency group jumped by about a quarter after the company appeared to finally draw a line under its recent accounting scandal.
The share price is still only at 73p at the time of publication, however – far below the £3.30 they were worth before the scandal emerged in August 2019.
It is almost a year since half the board, including co-founder Lord (Maurice) Saatchi, quit on 10 December 2019.
M&C Saatchi suspended its shares at the end of September 2020 after it failed to complete an audit of its accounting errors for the 2019 financial year before its deadline.
As part of a slew of management changes, company veteran Moray MacLennan has succeeded David Kershaw as chief executive, and Gareth Davis, the former Imperial Tobacco chief executive, has taken over from Jeremy Sinclair as chair.
M&C Saatchi said today that its audited accounts showed “no change” to profit in 2019, as reported previously in September. It also said an additional non-cash adjustment of £2.8 million was required for 2017 and earlier periods.
The company is under investigation by the Financial Conduct Authority over how its accounting regularities were disclosed to the market. M&C Saatchi has admitted to £25.8 million of accounting errors and misjudgments, with £14 million of direct misstatements of profit before tax.
Today, M&C Saatchi reported a pre-tax loss for 2019 of £8.6 million, compared with a loss of £5.4 million in 2018. Revenue was down 8.7% year on year to £381 million.
When excluding the group’s accounting charges and other measures, the company reported a headline pretax profit of £18.3 million, down 22% year on year.
M&C Saatchi said in the report: “2019 proved to be a very difficult year for the Group as a result of the historical accounting errors. It forced the company to re-evaluate, rethink and fine-tune many aspects of its business and operations, including its corporate governance and strategic direction.
“Looking forward, with a fresh strategy, structure and controls harnessed to the core M&C Saatchi spirit of creativity and entrepreneurial energy, we are very confident of a successful next chapter.”