M&C Saatchi – Vin Murria is now the biggest shareholder

Serial IT entrepreneur Vin Murria is now the largest shareholder in this advertising agency. Something’s afoot, writes Mark Watson-Mitchell. 

Whatever you do please do not chase this one – yet!

However if, like me, you were interested to see a new big shareholder popping up in the investing ranks in world-renowned advertising agency group M&C Saatchi (SAA), then having a few shares now might be the prelude to a bit of fun.

The new player in the equity is Vin Murria, a very clever lady whom I have followed for years. Last week she declared a stake of 15,250,000 shares, representing 13.25% of the group’s equity.

I first met Vin when she was a director with Michael Jackson at his Elderstreet Investments venture capital fund management group.

Vin (57) has a BSc Hons (First) in Computer Science, an MBA, and an honorary doctorate from Edinburgh Napier for her services to business. In 2018, Vin received an OBE for services to the UK digital economy and advancing women in the software sector.

She set up Advanced Computer Software in 2008 and sold it for £765m in 2015. Other companies that, amongst so many others, she has been involved with as director or prime mover include Hg Capital, finnCap, DWF, Kewill Systems, Greenko, Softcat, Sophos, Zoopla, and Chime Communications.

It is perhaps the latter company that gave her some inroad into the vagaries of the advertising and marketing world.

So, from her undoubted base knowledge of computers and technology, why is Vin getting involved so convincingly in the Saatchi business?

The advertising agency was set up in 1995 by brothers and advertising moguls Maurice and Charles Saatchi after they were ousted from Saatchi & Saatchi.

Today M&C Saatchi plc provides advertising and marketing services in the UK, Europe, the Middle East, Africa, Asia, Australia, and the Americas.

It offers its clients various services, such as, media buying, direct marketing, talent management, mobile marketing, research agency, website construction, branding and digital marketing, design, marketing strategy, finished art and production, marketing consultant, and sport sponsorship and entertainment PR agency.

Way back in December last year the group stated that it was undergoing an accounting review related to several units in the company’s UK business overstating income and receivables, among others, and that it would need to restructure its UK operations.

At the beginning of April this year the company issued its Covid19 Update, which described a reduction in activity in several of its markets – which is totally understandable.

At that time its shares were just 30p. By the time that Vin’s stake crossed a big notifiable position on the last day of April the shares were up to 38p. So, is it reasonable to assume that her holding cost a maximum £5.8m?

Her stake was declared to the company on Monday of last week, by which time they had climbed to 45p, and then up to 60p when it was announced on Tuesday. By the close on Thursday evening they had been up to 73p and subsequently eased back to 67p.

There are some 115.1m shares in issue, of which the three principal directors own 3.98% each, a total of 13,767,076 shares. Directors of the subsidiaries own another 1.98%.

Institutional holders include Invesco Asset and Invesco Advisers together (14.69%), Octopus Investments (9.34%), Paradice Investment Management (8.23%), Aviva (5.32%) and Herald Investment Management (4.64%).

Paradice, by the way, is an Australian fund management group with some $17bn assets under management.

Vin now has more shares in the group than any other individual or group holder, and certainly more than the group’s directors. So, what are her plans? She is already showing a possible gain of 68% on her now £9.76m holding.

Obviously, the group has had some big accounting errors to administer and more may well be announced when the 2019 results are declared later this month.

Gamblers would play this stock carefully until the full ramifications are known. But, with its shares at 64p, I would rather have a few now and look to top up when they fall back.

I like Vin and she is shrewd, I would prefer to be playing in her game, whether it is short or long term.