S4 Capital restores executive pay as trading returns to pre-Covid levels
S4 Capital
49.84p
16:40 25/04/24
S4 Capital, the advertising agency founded by Sir Martin Sorrell, has restored executive pay packages following a strong third quarter.
Media
11,717.59
17:09 25/04/24
The firm, which Sorrell founded two years ago following his acrimonious departure from media giant WPP, cut executive and non-executive directors’ compensation by 50% in March in response to the Covid-19 pandemic. No cash bonuses were taken for 2019 either.
But on Monday S4 said: "The group continues to trade extremely well, in line with post-Covid-19 forecasts and objectives for 2020. Given the return of levels of activity to pre-Covid-19 levels, the board has decided to return executive and non-executive directors’ compensation to the levels they were in March…with effect from 1 October."
Total revenues in the three months to September end were £86.4m, up 53% on the same quarter a year earlier, or 13% on a like-for-like basis. Gross profits rose 79% to £75.3m. Year-to-date revenues were up 58% on 2019, at £227.7m, while billings were ahead 12% at £424.0m.
The third quarter was boosted by a strong performance in the Americas, which saw gross profits soar 93% to £55.1m, or by 27% on a like-for-like basis.
Sorrell said: "We continue to trade in line with ambitious internal and external targets, which now include doubling both top and bottom lines organically over the period 2021 to 2023.
"Covid-19 has acted as an accelerator for search, social and e-commerce. Our very significant client wins in 2020 signal that we are achieving client conversion at scale."
Major client wins so far this year include Google, BMW/Mini and an unnamed tech company. S4’s client objective is to develop twenty clients with more than £20m revenue per year each.
Jessica Pok, analyst at Peel Hunt, said: "While no numbers are given, [S4] states that both EBITDA and EBITDA margin is up very strongly in the third quarter, as momentum builds in the second half.
"The company is optimistic about the macro prospects for 2021."
As at 1015 GMT, shares in S4 where ahead 2% at 447.5p.