S4 Net Revenue Drops 10% in First Half

Sir Martin Sorrell's S4 Capital has reported a 10.0% drop in first half net revenue, on a like-for-like basis (LFL), to £328.2m (c.$445m), with EBITDA down 30% LFL to £20.8m 'as expected'.

Sorrell, who is Executive Chairman, blamed market volatility and client caution, but the company expects improved performance in the second half due to the timing of key contracts.

S4 lowered its annual revenue forecast, and said companies were cutting their marketing budgets due to global economic uncertainty, including changing US tariff policy. LFL net revenue is now expected to fall by mid-single figures this year, but the group maintained its annual like-for-like core operational profit guidance, with H2 revenue expected to gain from the timing of from new business wins, and from its ongoing measures to reduce costs. Headcount at the group is down to around 6,900, a drop of 10% since last June.

After a strong 2022, S4 began reporting declines two years ago, but overall figures for 2023 were down only about 4% on the previous year - the decline accelerated rapidly in 2024.

In the longer term S4 notes that 'We continue to expect our growth to outperform our markets and operational EBITDA margins to return to historic levels of around 20%.'

Web site: www.s4capital.com .