Revenue and Profit Rise in Q1 for Sorrell's S4

Sir Martin Sorrell's recently launched marcoms business S4 Capital has reported a 38% increase in revenue to £40.9m for the three-month period ending 31st March, with gross profit up more than 37% to £32.8m.

S4 was set up by Sorrell (pictured) in May last year, and in November the group reported revenue of £26.2m for the three months ended 30th September, while gross profits rose 32% to £18.3m.

The company bought Dutch creative digital production company MediaMonks, then merged with programmatic solutions provider MightyHive. Last week, it expanded its digital content and programmatic capabilities with the acquisitions of Amsterdam and Miami-based film production studio Caramel Pictures and São Paulo-based programmatic consultancy ProgMedia. During the first quarter MediaMonks, which represents approximately two-thirds of total gross profit, saw a like-for-like revenue rise of 25% and gross profit 20%; for MightyHive, which represents the other third of total gross profit, like-for-like increases were 70% revenue and 71% gross profit. Combining the two, like-for-like group revenues and gross profit rose 35% and 34% respectively.

Geographically, all regions showed 'very strong growth'. The Americas, which accounts for 65% of total revenues, enjoyed like-for-like revenue and gross profit rises of 26% and 25%. For EMEA, which represents 27% of the business, the figures were 42% and 39% respectively, and for Asia-Pacific (7%), 130% and 169%.

Commenting on the results, Sorrell said: 'Client interest in, response to and engagement with the group's first party data model driving and fuelling digital content creation and programmatic media planning and buying have escalated in the New Year. New business activity is frenetic and the pipeline is still at twice the level of last year. There is no doubt the faster, better, cheaper mantra resonates and that clients want a unitary P&L approach from their advisors'.

Web site: www.s4capital.com .