Omar Oakes
Dec 7, 2020

M&C Saatchi shares up a quarter on return to stock market

The ad agency group is still trading far below the level it was at when accountancy scandal was revealed in 2019.

M&C Saatchi: announced a further £2.8m adjustment for 2017 and earlier periods
M&C Saatchi: announced a further £2.8m adjustment for 2017 and earlier periods

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.”

Campaign UK

Related Articles

Just Published

1 day ago

Campaign Crash Course: How to maximise DOOH returns

Digital out-of-home media buying is becoming more common and accessible across Asia. So how does it fit with an omnichannel strategy and how can you measure its returns?

1 day ago

Raya film festival: Watch ads from Julie’s, ...

This year’s top prize goes to snack brand Julie’s, whose ad turned Raya stereotypes on its head and will be remembered for years to come.

1 day ago

TikTok to marketers: Go native and multigenerational

The platform enlisted KFC at NewFronts in the US to persuade advertisers to spend on TikTok.

1 day ago

Uninformed consent, addiction among persistent ...

CAMPAIGN360: Around 170,000 children go online for the first time every day, but the industry has yet to find a way to build their trust and target them safely.