M&C Saatchi shares set to be suspended

M&C Saatchi expects its shares to be suspended as the scandal-hit advertising agency struggles to meet a deadline for filing its financial results.

The group behind some of Britain's most distinctive campaigns is poised to file its annual results "within a matter of weeks" but miss the end of September deadline.

That will result in the shares being temporarily suspended from Thursday until the results for the year to December 2019 are filed.

The announcement is the latest twist in a sorry saga for M&C Saatchi after it became embroiled in an accounting scandal last year that sent shares plunging and prompted the resignation of founder Maurice Saatchi and three directors.

However, the company still gave an update on its financial performance on Wednesday because the audit process was "so close to completion".

It said unaudited net revenues were up 2pc to £256.4m last year, with pre-tax profits falling 28pc to £18.3m over the period but statutory pre-tax losses widened £2.3m to £8.6m.

M&C Saatchi said it was trading well and profitably this year.

Chief executive David Kershaw said the past year had been "hugely challenging" for the company and investors, but it was  "very confident of a successful next chapter".

He claimed the staff commitment ensured the agency remained resilient despite the pressures of the pandemic.

"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.

"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."

Advertising mogul Lord (Maurice) Saatchi, considered one of the greatest admen of his generation, resigned in December after the accounting error caused shares to tank 45pc.

Along with his brother Charles, he was famed for his work for the Conservatives under Margaret Thatcher and later leaders.

The Tory peer left as part of boardroom clear-out, which also saw non-executives Lord Dobbs - author of political thriller House of Cards - Sir Michael Peat and Lorna Tilbian also leave the company

The resignations came after it was discovered that M&C Saatchi had overstated profits by £11.6m despite auditor KPMG signing off the accounts.

Forensic accountants from PwC were appointed in October by new finance chief Mickey Kalifa.

It emerged the company’s top brass were hitting targets by booking in revenues without adding on the associated costs.

The Financial Conduct Authority launched an investigation into the ad agency at the start of the year.

Shares in M&C Saatchi rose 0.5pc to 57.9p but were close to 400p early last year. The company is worth just £66m.