S4 Capital reports 2021 results after 'unacceptable' and 'embarrassing' delay

S4 Capital has finally announced its 2021 results, after two postponements, a delay that Executive Chairman Martin Sorrell said was “unacceptable” and “embarrassing to all of us.”

Speaking on an earnings call in London this morning, Sorrell said the company was implementing "significant changes" to its financial process in an attempt to ensure that "this never happens again." He told analysts the last two months had been "a difficult period ... and it's been difficult to detail the aspects of the audit that have been causing concern."

According to Chief Financial Officer Mary Basterfield, while the first delay was caused by resource shortage due to COVID and lockdown in the Netherlands, the second delay was down to "issues within our content practice" including "control weaknesses, staff turnover and lack of detailed documentation." These issues were related to the "legacy MediaMonks business," she said, and were primarily around "cutoff and timing around accounting periods" and a "lack of understanding of the accounting standards."

The delayed results were in line with analyst expectations. The company doubled its revenue to £687 million ($847 million), which Basterfield said was within the range of market estimates. Gross profit was £560.3 million, up 44% on a like-for-like basis. However, S4 recorded a pre-tax loss of £55.7 million ($68.7 million) after adjustments.