S4 Capital Unveils Bullish Half Years, As Profit Growth Gets Revised To 40%

S4 Capital Unveils Bullish Half Years, As Profit Growth Gets Revised To 40%

Sir Martin Sorrell’s S4 Capital continues to impress, unveiling some top numbers in its half-year results.

The London-based agency saw like-for-like gross profit (net revenue) up 49 per cent and accelerating to 66 per cent in second quarter, more in line with the fast-growing digital platforms.

Like-for-like gross profit (net revenue) guidance for 2021 increased for the third time this year, now from 35 per cent to 40 per cent.

Operational EBITDA was up 91 per cent reported, 30 per cent like-for-like and 36 per cent  pro-forma with EBITDA margin of 14.5 per cent reflecting continued investment in human capital and “whopper” growth in the first half and preparation for a continued strong second half, signalled by July’s like-for-like gross profit (net revenue) growth of over 50 per cent.

Other financial highlights included:

• Billings were £547.5 million, up over 110 per cent reported, up over 82 per cent like-for-like, up almost 82 per cent pro-forma.

• Revenue £279.3 million, up almost 98 per cent reported, up over 56 per cent like-for-like, up almost 57 per cent pro-forma.

• Gross profit (net revenue) £236.7 million, up almost 91 per cent reported, up over 49 per cent like-for-like, up almost 50 per cent pro-forma.

Commenting on the numbers. Sorrell said: “We have had a super strong first half start to 2021, in line with the fast-growing digital platforms. Even in comparison to 2019, we are up strongly, again more like the digital platforms. It is clear that the tragedy of covid-19 has accelerated the speed of digital transformation and disruption at consumer, media and enterprise levels. Especially, in these difficult times, we continue to be committed to ensuring that our people are well and safe, with sustainability and responsibility being a priority.

“These results confirm that S4Capital is converting at scale with five ‘whopper’ client (clients of more than $20 million per annum gross revenues) already and ten more identified out of an overall target of 20. We are clearly in a disruptive, growth sweet spot and our digital only, faster, better, cheaper, unitary, holy trinity” model, which combines first party data with digital content, data and digital media is gaining traction, particularly in a cookieless world.

“After only three years, on our third birthday as a listed company and with a market capitalisation of around six and a half billion dollars, which is well in to the top 125 FTSE companies, we are now in a position to build even stronger value-adding relationships with tech, healthcare, financial and FMCG clients amongst others. And with a strong and liquid balance sheet and significant combination firepower we are in a great financial place to expand through further combinations, which will add to our data, content, digital media and, potentially in the future, technology services capabilities. The second half of 2021 and the prospects for 2022 look very good primarily driven by the fiscal and monetary stimulus, as well as the years beyond driven by digital transformation,” he said.




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