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News 1 Apr 2022 - 4 min read

S4 Capital share price plummets, results delay ‘looks bad’

By Sam Buckingham-Jones - Deputy Editor
S4 Share Price

S4's share price fell more than 30 per cent on Wednesday, and fell further on Thursday.

Sir Martin Sorrell’s S4 Capital business has had a tough few days. Its share price has fallen almost 40 per cent, after its auditor, PwC, could not sign off on its results in time for a market update.

What you need to know:

  • S4 Capital’s shares have plummeted almost 40 per cent since Wednesday, from 474p to 289p, when it said it would delay a London Stock Exchange performance update as PwC was still going through its finances.
  • The lack of update, and silence from S4, has worried the market, though S4 says its results will be within the range of market expectations. The company has been trading strongly in the first two months of 2022.

Shares in Sir Martin Sorrell’s advertising holdco S4 Capital have plummeted by almost 40 per cent over the past two days, after the business said its auditor, PwC, had not been able to sign off on its results.

On Wednesday, S4 put out a London Stock Exchange announcement that PwC were “unable to complete the work necessary for S4 Capital to release the Preliminary Statement”, which was due on Thursday.

The company says it will release the results as soon as possible but noted the numbers will be “within the range of market expectations and continued to trade strongly in the first two months of 2022”.

It has been an unusually fraught month of market updates for S4. On March 1, S4 said PwC had requested an extension to complete its audit work, citing the impact of Covid and Omicron “on travel and resource allocation”.  It said it would update the market on March 31. Now, even with the extension, it has missed that deadline.

S4 hired a new Chief Financial Officer, Mary Basterfield, in November last year – she started in January.

The FT reported that Morgan Stanley analysts were told it was “no longer a resource issue”. “The lack of a revised date for the publication of results suggests the aspect of the audit in question is non-trivial and means the auditors are unable to complete their work within a specified timeframe,” they said.

Commentators have had mixed reactions to the fall. Reuters’ BreakingViews columnist Ed Cropley wrote there are reasons this could be a run-of-the-mill problem from overcautious number crunchers, but “any delay to results of this nature looks bad”.

“At the very least, it implies poor organisation and a possibly chaotic finance department that makes the auditors’ task more laborious,” he wrote.

Sorrell spoke to Mi3 last year for our 100th podcast episode. Among many observations over the interview, he admitted he couldn't move fast enough to reengineer WPP when he was at the helm. 

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