S4 Capital founder and executive chair Martin Sorrell is unhappy the release of 2021 results for his pure play digital advertising group was delayed twice.
He described this as “unacceptable and embarrassing”.
He pointed to control weaknesses, staff turnover, and lack of detailed documentation, particularly relating to revenue and cost of sales recognition.
The company is upskilling the finance team and a number of senior hires have already been made in 2022.
In 2021, billings increased 99.4% to £1.3 billion, up 66.8% like-for-like.
Top line revenue was 100.4% higher at £686.6 million in the year to December. Like-for-like jumped 52.4% to £342.7 million.
S4 Capital says 2022 has started well with first quarter gross profit / net revenue growth ahead of guidance.
Sir Martin described growth, both organic and through business combinations, as very satisfying.
“The delay in producing our 2021 results is unacceptable and embarrassing and significant changes in our financial control, risk and governance structure and resources are being implemented and planned, including several significant additions to the central and Content practice financial teams and the Audit Committee," he says.
“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.
“2022 has started, more than in line with our latest three year plan to double gross profit/net revenue organically in three years
“Although global GDP forecasts have slipped in the past few months from 4-5% to 3%+, we believe 2022 will generally be a good year economically overall, with consumers temporarily insulated from an inflationary squeeze by COVID savings.
“This, despite the significant inflation, higher interest rates, continued COVID lockdowns in China, and the bitter, vicious war in Ukraine - which will raise risk levels for clients in Central and Eastern Europe and to a lesser extent Asia Pacific, whilst lowering them in North and South America.
“As defence budgets are increased, the need for strong technology companies with a robust surrounding technological ecosystem will become more and more apparent. 2023 may be a different kettle of fish as GDP growth weakens further and geo-political tensions impact economics more significantly.
“Although a bi-polar world and populist forces may check globalisation and free trade and slow overall global GDP growth, the demand for technological development and digital transformation will continue to drive the demand for our digital marketing services.
“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."
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.