Maurice Saatchi quits M&C Saatchi

Marco Green
December 12, 2019

This was the second profit warning for the United Kingdom firm in the past three months and came after it launched an internal review into the accounts of its United Kingdom subsidiaries in August.

The non-executive directors who have "stepped down" are Lorna Tilbian, a media analyst and stockbroker who joined M&C's board in 2018 as its first female NED; Michael Dobbs, Conservative peer and author of the original House of Cards novel; and Michael Peat, a former KPMG accountant who was Prince Charles' private secretary from 2002 to 2011. "We are determined to restore the operational performance and profitability of the business".

They may be big names that conjure up the past glories of United Kingdom advertising, but bad corporate governance looks distinctly old school these days and there's no room for sentimentality now, not when there's an £11.6 million hole in the accounting. In total, the company was pushed to reaccount for roughly £6.5m on its balance sheet.

M&C Saatchi said it would restructure its United Kingdom business in a bid to improve performance.

"Investors will now be hoping that a fresh approach in the boardroom will help chief executive David [Kershaw] and relatively new finance chief Mickey Kalifa with their root-and-branch review of the business and their efforts to turn around M&C Saatchi's financial results and reputation".

The company's shares have lost more than two-thirds of their value since August.

Presiding over the profit warning. David Kershaw, the group's chief executive, admitted the numbers "make for very hard reading - both for us as a management team and for all of our stakeholders". It also announced that it expects underlying profit before tax for the full year 2019 to be between 22-27% below 2018 on a like-for-like basis and that it would be restructuring its United Kingdom office. Profit fell 67% to £2.5m.

The self-declared "biggest independent creative agency in the world" operates in nearly 30 markets.

Other reports by Click Lancashire

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