M&C Saatchi's £15m net cash forecast is 'substantially ahead of expectations'

Pre-tax profit remains in line with previous forecasts, down between 22% and 27% year on year.

David Kershaw: Called accounting issues 'most painful moment' in group's history
David Kershaw: Called accounting issues 'most painful moment' in group's history

M&C Saatchi is forecasting net cash for the year ended 31 December 2019 to be at least £15m, which it said is "substantially ahead of expectations".

The troubled group previously expected net cash to be around £5m. In a trading update released this morning (Monday), M&C Saatchi said the increase is down to "the implementation of improved cash collection processes".

Two M&C Saatchi PR agencies to merge as Molly Aldridge departs

Pre-tax profit remains in line with previous forecasts and is expected to be down between 22% and 27% year on year.

City analyst Peel Hunt said that although the strong cash position is "very encouraging", M&C Saatchi still has a lot of work to do and has advised investors to hold.

"For the shares to gather momentum, we need to see evidence of stronger trading for FY20 and also a rebuilding of the board with independent non-executive directors. Hence, ou 'hold' recommendation and 120p target price."

The full extent of M&C Saatchi’s accounting woes were revealed in early December, when the group’s share price fell 40% after announcing an £11.6m adjustment to its results.

In September, chief executive David Kershaw told Campaign that this has been the "most painful" moment in the company's 24-year history.

This article first appeared on PRWeek sister title Campaign

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in