Shares in M&C Saatchi (SAA) have plummeted by more than a fifth after the advertising group revealed accounting issues would lead it to take £6.4m in exceptional charges.
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The group set up an internal review after the independent auditor and audit committee raised concerns. The review found accounting policies had been misapplied, “mostly relating to the timing of revenue recognition and incorrect accounting of some assets and liabilities” in some of the group’s UK subsidiaries.
The review identified £4.9m in specific issues, but the group has set aside an extra £1.5m for any potential extra items. It has also appointed a new finance director for the UK division.