Saatchi hits the skids after accounting errors
NOT all publicity, it would seem, is good publicity.
M&C Saatchi shares dived to a seven- year low after the advertising agency warned its annual profit could be as much as 10pc below forecasts.
It comes six weeks after the group, founded by Maurice and Charles Saatchi in 1995 and best known for its work with the Tory party, revealed it will book a £6.4m one-off charge in its 2019 results to cover past accounting errors.
PwC is conducting an independent investigation to find out how far back the errors go and will report its findings in November, M&C Saatchi said.
But, in further bad news, pretax profits between January and June plunged 67pc year- onyear to £3.4m, when the sale of its 25pc stake in Walker Media was stripped out, as it was burned by losses at investee startup businesses.
Shares plunged by 12.3pc, or 21p, to 150p last night. Its stock has more than halved from 339p before the accounting difficulties were announced. Breakdown cover provider the
AA advanced 0.6pc, or 0.4p, to 68.6p as revenue rose 2.3pc to £491m and it began to stem customer losses.
It lost 20,000 net members between January and June, leaving it with 3.19m compared with 3.21m in the same period of 2018.
The firm is hoping to keep customers with its smart breakdown product, a device which costs an extra £50 a year and plugs into the car to monitor its health, which it will roll out to existing members later this year.
And it hopes to lure new ones in with an advert featuring the cast members from the cult TV show Red Dwarf. As the AA revved up, car dealer
Auto Trader stalled after UBS trimmed its target price from 540p to 510p, forecasting a difficult year for the industry. Its shares fell 3.7pc, or 19.3p, to 498.5p. FTSE 250-listed merchant bank
Close Brothers lost 1.5pc, or 21p, to 1354p after chief executive Preben Prebensen said he would step down next year after a decade at the helm. The FTSE 100 closed down 0.47pc, or 34.65 points, at 7291.43 – despite a positive start to the day - while the
FTSE 250 finished 0.62pc lower, or 124.72 points, at 19,919.07.
The UK’s Supreme Court’s ruling that Boris Johnson broke the law by suspending Parliament for five weeks sent the pound higher to $1.2474.
This weighed on the FTSE 100, whose stocks mostly rely on making profits in other currencies.
Irn Bru-maker AG Barr fizzed, jumping 3.4pc, or 20p, to 606p, as it stuck to its full-year estimates and boosted the interim dividend from 3.9p to 4p a share, despite a wet summer and the sugar tax hitting first-half sales and profits.
Skinny Tan maker Innovaderma rose 8.4pc, or 6.5p, to 83.5p, after it doubled full-year profits to £1.4m and said its Wonder Serum, a product which was exclusive to Boots, had performed brilliantly.
Over on AIM, the company behind the upmarket cinema chain Everyman rallied 1.1pc, or 2p, to 184p, as admissions and revenues both rose in the 26 weeks to July 4. It plans to open a further 15 venues by 2022 and is looking at another eight sites.
Media group Digitalbox is on the hunt for more acquisitions like The Daily Mash, which it bought in March, and expects trading in the second half of this year to be better than the first half. Shares closed 2pc higher, up 0.12p, to 6.25p. Finally energy minnow UK Oil &
Gas shed 4.1pc, or 0.05p, closing at 1.18p after telling the market the oil rig that will drill into a site near Gatwick Airport, in West Sussex, has arrived.