S4 Capital lost more than a third of its market value on Wednesday after Sir Martin Sorrell’s advertising business released a statement saying its auditors were unable to sign off on the results just hours before they were published. Father.
The London-listed group on Wednesday afternoon said PwC had informed the company it was unable to complete the “necessary work” for S4 Capital to continue with its scheduled release of full-year preliminary results on Wednesday. Thursday morning.
“The result is, [S4] will release preliminary results for 2021 as soon as PwC completes their work,” the company said, adding that it expects 2021 results to “be within the range of market expectations.” .
S4’s share price fell just under 35% following the announcement, wiping almost £1 billion off the value of the company. Shares rebounded slightly on Thursday morning, gaining just over 8%.
The company, which spent Wednesday preparing its results to be announced the next day by arranging media and analyst calls, appeared to have been clouded by PwC’s decision. .
This is the second time in the month S4 delayed the results. On March 1, the company said PwC had requested more time to complete the audit “because of the impact of Covid and Omicron on travel and resource allocation, particularly in the Netherlands”.
Sorrell, who launched the S4 in 2018 after wise departure from WPP, declined to comment beyond the company’s statement.
PwC did not immediately respond to a request for comment. Big Four accountants have audited S4 accounts since the financial year ended December 2018.
Delays in reviews sometimes indicate disagreement between management and the auditor. Increased regulatory pressure and fines on UK auditors have resulted in auditors becoming more selective about the clients they work with and ask company management more questions before they sign out of their accounts.
It is unusual for an auditor to notify a company that it will not sign the results the evening before the planned release date, said one analyst, who asked not to be named.
“It sounds very suspicious, but it could be a small thing – we don’t know,” the analyst said.
S4 is the second PwC customer in the UK to announce postponing publishing of its accounts this week. RandoxThe Northern Ireland-based medical diagnostics company, said on Tuesday that its audited accounts would be released later than planned because PwC and its own financial group had been affected. by Covid-related absences.
