Growth for Sorrell's New Firm

Sir Martin Sorrell's new group S⁴Capital has presented its inaugural results for the period ending 31st December 2018. Pro forma revenue for the company and predecessors was £135.9m, up 58% on 2017; while pro-forma operational EBITDA was £22.4m, up 99%.

Comparisons treat the company as if it had been operating for the whole of 2018 with its current constituents whereas in fact MediaMonks was bought in July and MightyHive only on Christmas Eve. Actual unaudited revenue for S⁴ post-acquisitions was £54.8m and operational EBITDA £4.7m. S⁴ reported an operating loss of £8.5m, which includes adjusting items of £12.5m and pro-forma adjusted operating profit of £21.0 million.

Pro-forma, the Americas accounted for 65% of revenue, EMEA 29% and Asia Pacific 6%. Splitting by business function, digital content accounted for 75% of revenue, with an operational EBITDA margin of 22%; and programmatic was 25% of revenue, with EBITDA margin 24%.
The Group now employs around 1,200 people in sixteen countries, with a market capitalization of c.£450m ($600m), and says its new business pipeline is running at approximately twice the level of last year. S⁴ has a three-year plan for the period 2019-2021 which calls for a doubling of revenue and gross profits over pro-forma 2018, with an improvement in EBITDA margin.

Sorrell, who left Kantar eleven months ago but found out last week he was to receive shares worth around £2.1m from the group's executive performance bonus scheme this year, now serves as S⁴'s Executive Chairman. He said of the S⁴ figures: 'It is clear that the Company's purely digital model based on first party data fuelling digital content and programmatic is resonating with clients. Our tag line 'faster, better, cheaper' and unitary, one P&L structure also appeal strongly. The imperatives will be to broaden and deepen relationships with existing and new clients; to broaden and deepen geographical coverage; and to attract additional data, content and media talent and resources through direct recruitment, acquisition and/or merger'.

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.