A £ 11.6million black hole was discovered in the advertising agency’s accounts last year, with four directors later leaving the board
() said he had improved fundraising since the exodus from boards last month sparked by the departure of co-founder Lord Saatchi, among others.
The advertising agency, which was founded in the 1990s by brothers Maurice and Charles Saatchi after their expulsion from their eponymous former agency, said pre-tax profits and windfall charges ended 2019 in line with one-year forecast. on the other. fall of 22-27%.
READ: M&C Saatchi stumbles as co-founder leads exodus from boardroom
Managing director David Kershaw, who has worked with the Saatchis since the 1980s, said in a statement the group had around £ 15million at the end of the year, well above £ 5million sterling shown in the December 4 update.
This pre-Christmas update, which was followed by the departure of chief executive Maurice Saatchi and non-executives Michael Dobbs, Michael Peat and Lorna Tilbian, included a profit warning in which the company confirmed that the black hole in its accounts had risen to £ 11.6. mln after independent review by PwC.
This followed an announcement in August that revealed the company would take a one-off charge of £ 6.4million in the first half of the year related to incorrect income and cost claims.
Investors took fright as the company’s shares plunged from 339p in August to less than 70p after the December update.
Kershawi, who said the people who had been involved in the reporting errors were “no longer with the company,” said on Monday the company had “improved money-raising processes” in place. last months.
Stocks rallied early in the session, but by mid-morning they were down 5% to 114.95 pence.
Peel Hunt analysts said: “Although FY19 will be weaker than previous years in terms of trading, it is very encouraging to see the strong cash position for the end of the year.
“However, there is still a lot of work to be done. For stocks to gain momentum we need to see evidence of stronger trade for FY20 and also a rebuilding of the board with NEDs. independent. “