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Confident Q3 for Sorrell's S4
Sir Martin Sorrell's S4 Capital has reported 26.5% like-for-like revenue growth, in a third quarter trading update. Reported revenue was up 68.2% to £300.1m, and the firm says operational EBITDA for 2022 is in line with a revised target of c.£120m.
 The company, formed in May 2018 after Sorrell left WPP under a cloud, has focused mainly on digital marketing but now includes a new Technology Services offering after a buy 18 months ago. In the latest report, the firm notes that it now has ten 'whopper ' clients in its sights - defined as £20m in annual revenue and a key measure in its growth plan.
The firm's share price has recovered, almost doubling from a low in July, but is still at around a quarter of its September 2021 high of £831, following problems with delays to financial results in the Spring. S4's five strategic objectives for 2022 including a commitment 'to try to ensure that we never experience an unacceptable delays in our results again', with extensive measures to strengthen financial control, treasury and legal, risk and governance functions.
Q3 revenue growth was strongest in the Americas (up 89.3% like-for-like), followed by EMEA (42.7%), with Asia Pacific bringing up the rear (16.1%). Meanwhile 'more active and measured control of hiring across the Company' has seen headcount decline very slightly from 9,041 at the end of Q2 to 8,956 at the end of Q3.
In his statement, Sir Martin (pictured) said 'Despite the current macro political and economic gloom and slowing tech growth, our top-line momentum has been more than maintained in the third quarter and remains relatively strong into the fourth quarter. This is an enormous credit to our people and their ability to operationalise our purely digital, data-driven, faster, better, more efficient and unitary model, with all three practices growing their top lines strongly'.
Web site: www.s4capital.com .
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