Shares in Sir Martin Sorrell’s S4 Capital fell sharply after the group warned investors that 2023 revenues would be lower than the year previous.
Revenues at the digitally focused advertising agency were almost a fifth lower year-on-year at £245.9 million, while billings from clients were down seven per cent at £450.3 million.
Like the other holding companies, S4 blamed the downturn on tech companies closing the purse strings.
On the announcement of the numbers, shares in S4 initially dropped a quarter on Thursday morning after its latest profit warning sent them into free fall. They recovered some of the losses to trade at 59p, which is a tenth of a peak of 878p that occurred 24 months ago.
S4 has now lost more than two-thirds of its value since January after multiple profit warnings.
Commenting on the numbers, Sorrell said: “Trading in the third-quarter was difficult, reflecting the global macroeconomic conditions with continued client caution to commit and extended sales cycles, particularly for larger projects and to some extent clients in the technology sector.”
He added that the group would end the year near to the top of its guided range on net debt of £180-£220 million, reflecting an aggressive mergers and acquisition spree over the past few years.
Sir Martin said he remained confident in his strategy and business model, which he said would position the agency “for above average growth in the longer term, with an emphasis on deploying free cash flow to dividends and share buybacks, especially as 2024 will have no further merger payments”.
