S4 Capital revenues jump despite tech slowdown
Investors in S4 Capital saw a much-needed boost in share price today after the London-listed firm appeared to dodge the wider tech turmoil.
The brainchild of WPP founder Sir Martin Sorrell revealed that like-for-like gross profit climbed over 29 per cent to £249.9m in the third quarter, with “whopper” client projects bolstering the company’s results.
Shares rallied to a four month high after the marketing giant said earnings before interest, depreciation and amortisation (EBITDA) were also boosted by a control of hiring across the marketing titan.
The company had raised eyebrows in previous quarters for its intense acquisition strategy – snapping up over 30 media groups in the last four years alone.
The number of people in the firm was 8,956 at the end of the third quarter, down one per cent compared to 9,041 at the end of the second quarter, “reflecting more active and measured control of hiring across the Company,” S4 said.
Executive chairman of S4 Sir Martin Sorrell said in a statement that despite the current macro political 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'”.
However the firm did concede that its data and digital media practice experienced some slowdown as Apple’s privacy changes cut into margins.
Head of investment at interactive investor Victoria Scholar said that whilst the employment controls helped boost revenues, which were up 27 per cent to £300m, the global firm’s Asian business “remains a laggard as China’s draconian zero-tolerance to Covid approach continues to weigh on S4 Capital’s business opportunity in the region”.
Despite shares climbing over six per cent this afternoon, S4 is still down over 22 per cent in the year to date.