S4 Revenue Down in 'Difficult Year'

Sir Martin Sorrell's digital marketing group S4 Capital has issued a trading update following a 'difficult year' in which revenue declined around 4%, and says it does not expect any improvement in macro-economic conditions this year.

The company said today that trading in the fourth quarter of 2023 was in line with expectations outlined in November, with cautious clients especially in tech sectors reining in their expenditure. While the company's operational EBITDA margin of between 10% and 11% reflects second-half improvement due to 'significant' cost reductions, and while net debt should be towards the lower end of guidance (range of £180m to £220m), the heady expectations of 2021 now seem very distant with share price around 5% of what it was in September of that year.

Executive chairman Sorrell said: 'After four years of very strong growth, 2023 was a difficult year impacted by volatile macro conditions and, consequently, cautious spending from clients, particularly those in the technology sector and from smaller project-based assignments. Our client relationships remain strong and we have also managed costs tightly.

'Initial indications are for an improvement in performance in the Content practice, reflecting cost reductions, broadly similar performance in Data&Digital Media to last year and a more challenging outlook for Technology Services. In these unpredictable times, we are focused on positioning the company for medium term growth, improving profitability and returning funds to shareowners'.

The group is on the web at www.s4capital.com .