Sorrell's S4Capital Posts First Half Year Profit

For the first half of 2020, Sir Martin Sorrell's marketing services investment vehicle S4Capital has reported pre-tax profit of £118k, compared with a loss of £8.5m last year.

Adjusted pre-tax profit fell 13.5% on a like-for-like basis to £13.9m, and like-for-like gross profit increased 12.2% to £124m.

During the period, like-for-like revenue was up 6.9% to £141.3m, or up 61% when including revenue from businesses acquired in the past year. Operational EBITDA, before central costs of £20.5m, fell 4.7% like-for-like, as the company dealt with the impact of the pandemic. However, the company increased its workforce to 2,644 from 1,375 at the end of the first half last year, in a move to support the stronger revenue and gross profit growth it says it anticipates in the second half of the year.

According to the firm, its current client roster continues to be dominated by the technology, FMCG, telecoms and pharma sectors, both by practice and geography. In a statement, S4 said it has high hopes of adding two more 'whoppers' to this roster - clients who represent more than $20m of revenue each year. The firm also said that given the progress in the first half of 2020 and July, it believes it has an even 'stronger fighting chance' of doubling organically (meaning like-for-like) over the three years 2020-22, and delivering like-for-like double digit revenue and gross profit growth and 'reasonably strong' margins in 2020.

Sorrell (pictured) added: 'These results confirm that S4Capital is currently in a growth 'sweetspot' and that its digital only, faster, better, cheaper, unitary, 'holy trinity' model, which combines first-party data with digital content, data and digital media, is migrating from brand awareness and trial to conversion at scale. After less than two years as a listed company and with a market capitalisation of around $2.5 billion, we are now in a position to build stronger value-adding relationships with tech, healthcare, financial and FMCG clients amongst others, and with a strong and liquid balance sheet in a great financial place to expand through further combinations, which will add to our data, content, digital media and technological capabilities.'

Web site: www.s4capital.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.