Sorrell’s S4 delays results after PwC unable to complete audit

S4 Capital misplaced greater than a 3rd of its market worth after Sir Martin Sorrell’s promoting enterprise issued a discover saying that its auditor had not been capable of log out on its outcomes simply hours earlier than they have been because of be printed.

The London-listed group mentioned on Wednesday afternoon that PwC had knowledgeable the corporate it was unable to finish “the work obligatory” for S4 Capital to go forward with a deliberate launch of its preliminary full-year outcomes on Thursday morning.

“Because of this, [S4] will launch its preliminary outcomes for 2021 as quickly as PwC have accomplished their work,” the corporate mentioned, including that it anticipated its 2021 outcomes to “stay inside the vary of market expectations”.

S4’s share worth fell by slightly below 35 per cent after the assertion, wiping nearly £1bn off the corporate’s worth. 

The corporate, which had spent Wednesday getting ready for its outcomes to be launched the subsequent day by arranging media and analyst calls, appeared to have been blindsided by PwC’s determination.

It’s the second time this month that S4 has delayed its outcomes. On March 1, the corporate mentioned PwC had requested extra time to finish its audit “due to the influence of Covid and Omicron on journey and useful resource allocation, notably within the Netherlands”.

Sorrell, who launched S4 in 2018 following his acrimonious departure from WPP, declined to remark past the corporate’s assertion.

PwC didn’t instantly reply to a request for remark. The Massive 4 accountant has audited S4’s accounts because the monetary 12 months ending in December 2018.

Delays in audit typically point out disagreement between administration and auditors. Elevated regulatory stress and fines on UK auditors have resulted in auditors turning into extra selective concerning the purchasers they work for and asking extra questions of firm administration earlier than they log out the accounts.

One analyst, who declined to be named, mentioned it was uncommon for an auditor to let an organization know it could not log out its outcomes the night earlier than a deliberate launch.

“It clearly sounds very suspicious, but it surely might be a minor factor — we simply don’t know,” the analyst mentioned.

S4 is the second PwC shopper within the UK to announce a delay to the publication of its accounts this week. Randox, the Northern Eire-based medical diagnostics firm, mentioned on Tuesday that its audited accounts could be launched later than deliberate as a result of PwC and its personal finance group had been affected by Covid-related absences.