S4 Capital PLC (LSE:SFOR) revealed it swung to a pre-tax loss last year as the marketing company run by Sir Martin Sorrell delivered its much-delayed results.
Having postponed the results release at the start and at the end of March, citing the need of auditors PwC requesting more time, the company eventually delivered unaudited results for the past calendar year.
Executive chairman Sorrell said the delay in producing the results "is unacceptable and embarrassing", with new chief financial officer Mary Basterfield planning and implementing "significant changes in our financial control, risk and governance structure and resources... including several significant additions to the central and content practice financial teams and the audit committee".
The results showed a loss before income tax of £55.7mln, versus a profit of £3.1mln in 2020.
This was despite billings almost doubling to £1.3bn, or up 67% on a like-for-like basis, and revenue doubling to £686.6mln.
Excluding certain ‘adjusting items’, namely costs related to acquisitions, share-based payments and depreciation, S4 reported an operational profit (EBITDA) of £101mln, up 62.4% reported, or like-for-like up 11.9%, pro-forma up 16.8%.
The group moved to a net debt position of £18mln at year end from net cash of £51.6mln a year ago after making £96.6mln in cash payments for M&A and increasing working capital investment primarily to fund larger accounts.
Sorrell added that in what is the company's third full financial year it has almost doubled in size, roughly half through organic growth and half through M&A.
"We continue to grow our top line at industry leading rates, despite Covid-19, and have exhibited agility in developing new content revenue streams quickly, in such areas as the Unreal Engine, the Metaverse, blockchain, crypto and NFTs placing us at the forefront of these significant disruptions."
Acknowledging that global economic growth forecasts have slipped in the past few months, "we believe 2022 will generally be a good year economically overall, with consumers temporarily insulated from an inflationary squeeze by Covid savings" but "2023 may be a different kettle of fish as GDP growth weakens further and geo-political tensions impact economics more significantly".
He concluded: "Digital marketing expenditure is closely correlated to, but not dependent on GDP growth, just as traditional media spending used to be in the last century."