StockMarketWire.com - Advertising company M&C Saatchi said it would make adjustments of £11.6m to its results owing to accounting errors, while also sounding an underlying profit warning due to weaker trading conditions.

As previously announced, accountancy firm PwC had been conducting an independent review of the company's books. The adjustment would be apportioned between its 2018 and 2019 financial results.

Separately, M&C Saatchi said its annual underlying pre-tax profit was expected to be 'significantly below' the levels expected at the time of its interim results.

Underlying pre-tax profit for calendar 2019 was seen falling 22%-to-27% on a like-for-like basis, excluding the impact of Walker Media profits in 2018.

The company pinned the warning on weaker-than-expected trading in the final quarter of the year and higher-than-expected central costs.

M&C Saatchi said it was restructuring its UK office to improve performance, generating a one-off charge of £2.5m and annual savings of around £6m in 2020 and onwards.

'This restatement of our numbers and the reduction in forecasts make for very difficult reading - both for us as a management team and for all of our stakeholders,' chief executive David Kershaw said.

'The only positives that we can offer are that a robust review has been undertaken and we have, under our new group finance director, started implementing processes and procedures to prevent such issues arising again.'

'The trading performance in the second half of this year is disappointing.'

'However our operating businesses remain strong, creative and competitive and we expect that, when combined with the impact of our restructuring coming through, we will have a stronger trading performance in 2020.'

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