S4 Capital on track to meet FY objectives, Q3 revenue and profits surge

Digital advertising group S4 Capital said on Monday that remained on track to meet its full-year objectives as it updated investors on its strong third-quarter performance.

S4 Capital said third-quarter billings were up 51% at £484.2m, while revenue was up more than 68% to £300.1m and gross profits were 73% higher at £249.9m.

Year-to-date billings were up 46% at £1.3bn, while YTD revenue 63% higher at £746.5m, and like-for-like gross profits rose 64% to £625.2m.

The London-listed group also stated it was still trading in line with its full-year top line objective of 25% like-for-like gross profit/net revenue growth and its profitability objective of operational underlying earnings of roughly £120.0m, adding that it had seen "little negative impact" so far from the current macro political and economic situation.

Chairman Martin Sorrell said: "Despite the current macropolitical 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.

"Given the reduction in global GDP growth rate forecasts for 2022 and 2023 and the likelihood of recession in some parts of the world, clients will be moving 'down the funnel', as we say, prioritising performance and activation, measurement of marketing return on investment and media mix modelling, which plays to our strengths. We believe this changing market environment will continue to offer significant growth opportunities given our client profile, relative size and disruptive model."

As of 0930 GMT, S4 shares were up 3.81% at 218.0p.

Reporting by Iain Gilbert at Sharecast.com