Sorrell’s S4Capital hit by financial results audit issue
I thought Sir Martin Sorrell had been oddly quiet lately. One of the reasons was that he was waiting to announce S4Capital’s 2021 financial results, due today.
But just before 4 p.m., digital marketing services group go-go, built around the Media.Monks content business, announced they were postponed:
“At 2:30 p.m. today (March 30, 2022), our auditors, PwC, informed us that they were unable to complete the work necessary for S4 Capital to issue the opening statement tomorrow morning.
“As a result, the company will release its preliminary results for 2021 as soon as PwC completes its work.
“The company believes that results for 2021 remain within the range of market expectations and have continued to trade strongly in the first two months of 2022.”
Shares in S4C fell by a third, wiping around £1bn of its value with executive chairman Sorrell’s paper fortune down £100m. The shares have since recovered slightly but are trading around £3 from a yearly high of over £8. S4C is now valued at £1.69 billion.
Pulling your annual results on such short notice is almost unheard of and will remind investors of the disaster that nearly overwhelmed M&C Saatchi when its auditors refused to sign off on accounts due to too early revenue recognition. The structure of S4C is no different from that of M&C, with the leaders of its distant empire also being shareholders of the company as a whole.
In 2018, Sorrell quit WPP, the massive advertising holding company he founded in 1985. This followed a row in the boardroom over alleged personal misconduct – which he strongly denies.