M&C Saatchi Plc (LON:SAA) said it had improved cash collection since the boardroom exodus last month sparked by that included the exit of co-founder Lord Saatchi among others.
The advertising agency, which was founded in the 1990s by brothers Maurice and Charles Saatchi after they were forced out of their previous eponymous agency, said that profits before tax and exceptional costs had finished 2019 in line with the guidance for a year-on-year fall of 22-27%.
READ: M&C Saatchi stumbles as co-founder leads board room exodus
Chief executive David Kershaw, who has worked with the Saatchis since the 1980s, said in a statement that the group had around £15mln of cash at the end of the year, well up on the £5mln indicated in the 4 December update.
That pre-Christmas update, which was followed by the departures of executive director Maurice Saatchi and non-executives Michael Dobbs, Michael Peat and Lorna Tilbian, included a profit warning where the company confirmed that the black hole in its accounts had grown to £11.6mln after an independent review by PwC.
This followed an announcement in August that revealed the firm would be taking an exceptional charge of £6.4mln in the first half of the year, relating to incorrect statements on revenues and costs.
Investors took fright, with shares in the company plunging from 339p in August to below 70p after the December update.
Kershawi, who has said that said those people who had been involved in the reporting errors were “no longer with the company”, said on Monday that the company has implemented “improved cash collection processes” in recent months.
The shares picked up in early trade but by mid-morning were down 5% to 114.95p.
Analysts at Peel Hunt said: "Although FY19 will be weaker than previous years in terms of trading, it’s very encouraging to see the strong cash position for the year end.
"However, there is still a lot of work to do. 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 NEDs."