TOP NEWS: S4 confident in digital marketing after robust first quarter – Morningstar

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(Alliance News) – S4 Capital PLC on Monday reported a performance in the first quarter of 2022 ahead of its guidance to the market, with a double digit jump in revenue reinforcing a confident outlook.
For the three months ended March 31, the London-based advertising and marketing agency posted gross profit at GBP171.1 million, up 65% from GBP104.0 million the same period a year before.
On a like-for-like and pro-forma basis, gross profit was up 35%.
This was on revenue which grew 70% to GBP206.0 million from GBP121.6 million, and rose 41% on a like-for-like and pro-forma basis.
S4 said that its momentum had been reinforced by two further “whopper” additions to its portfolio, with the acquisition of 4Mile and TheoremOne, bringing its total to eight against the company’s target of 20.
The group also said its performance makes an excellent start in achieving its 2022-24 three-year plan of doubling its size on a like-for-like basis, as well as its previous 2020-22 and 2021-23 plans, both of which have similar goals for a doubling in size.
Looking ahead, S4 maintained its guidance for a 25% rise in like-for-like gross profit and revenue for 2022, as new business activity remains strong, while the group’s pipeline is larger than it was at this time a year prior. For 2021, gross profit stood at GBP560.3 million, on revenue of GBP686.6 million.
“Given all this, we remain optimistic about our prospects for this year, particularly as consumer and corporate balance sheets remain strong, cushioned by the Covid stimulus. The chickens may well come home to roost in 2023, as interest rates rise further this year to counter the inflation surge. But, digital marketing expenditure remains robust, even in a recession, as, for example, our results in 2020 demonstrated, given its secular growth trend,” said Executive Chair Martin Sorrell.
“Despite the softening of global GDP growth because of the withdrawal of the Covid stimulus, significant inflation, increasing interest rates, the war in Ukraine and China’s continued zero-Covid lockdowns, the secular trend to digital marketing continues to provide strong tailwinds,” he added.
Shares in S4 Capital were up 4.2% at 297.27 pence on Monday morning in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
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