Sir Martin Sorrell, who launched the S4 Capital platform, blasted the significant delay in reporting annual results, with auditors “unable to complete the necessary work”.
The advertising agency, which was founded by Sorrell himself after he resigned from WPP, has had to delay the publication of its annual financial report twice due to the inability of its auditors, PwC, to do the job. on time.
In a phone call to B&T late last week, Sorrell said he believed the results should be released by Friday.
These delays proved to be quite costly for the company as they caused investors to lose faith in the company, making them think that S4 Capital did not want to release the report due to its poor appearance. That alone cost the agency an additional $150 million over its market price.
“The delay in producing our 2021 results is unacceptable and embarrassing,” Sorrell told investors and analysts during a presentation on Friday.
He also promised to restore lost confidence in the group for its potential investors, after a staggering loss of nearly $1 billion from its market value.
Some of the reasons for the long delay in publishing the report, according to PwC, included staff change and the lack of necessary documentation “particularly regarding recognition of revenue and cost of sales”.
Sorrell said S4 Capital is “honing” its finance team to keep pace with the company’s dramatic growth.
“Significant changes to our financial control, risk and governance structure and resources at the board, corporate and practice level are being implemented and planned to try to ensure this does not happen again. more and that we return to a normal financial calendar,” Sorrell said. “[A] full debriefing [is] planned to ensure that all PwC suggestions are taken into account.
The report showed that S4 Capital was able to double its revenue over the past year to $1.2 billion, as its share price rose 4% last Friday.