Sorrell's S4Capital on Track to Double in Size by 2021

Sir Martin Sorrell's recently formed marcoms business S4Capital has reported revenue of £87.97m for the first six months of 2019 - up an estimated 42%, or 38% in constant currency terms. According to the firm, it is on track to double in size organically by 2021.

The company was formed just six weeks after Sorrell (pictured) quit WPP last May, and in July beat WPP in a race to buy Dutch creative digital production company MediaMonks; then in December it agreed to merge with programmatic solutions provider MightyHive, for an enterprise value of US$150m. In April it bought Amsterdam and Miami-based film production studio Caramel Pictures and São Paulo-based programmatic consultancy ProgMedia.

For the six months ended 30th June 2019, billings were £184.23m. Had the company been trading in the first half of 2018, this would have meant an increase of 44.4%, or 38.7% on a constant currency, like-for-like basis. Gross profit was £70.19m, which would have been a rise of 44.0%, or 39.9% in constant currency terms. Operational EBITDA, before central costs of £12.10m, was down 8.5% against the first half 2018 estimate, or 17.4% against first half pro-forma in constant currency terms. The firm says operational EBITDA of £9.63m reflected an increase in central costs in the first half of 2019 of more than £2.30m, used to build out the new management team.

During the period, like-for-like headcount increased 60% to around 1,375 at half-year end. Sorrell comments: 'These results confirm the power and relevance of the faster, better, cheaper, digital-only unitary advertising model, with first party data fuelling content and programmatic. Now the task is to build significant scale organically, by broadening and deepening existing and new client relationships and adding resources through merger and acquisition'.

Web site: www.s4capital.com .