S4 Capital shares jump despite Sir Martin Sorrell’s firm warning on ‘client caution’
Digital marketing giant S4 Capital said it does not expect to see any macro-economic improvements this year, as the firm trades in line with lowered expectations.
In an update to markets,Sir Martin Sorrell, who owns the firm, said: “While it is early in the year, we are not expecting 2024 to show macro-economic improvement..
Shares however perked up this morning, up 3 per cent in early trading.
“Client caution on marketing spend will likely persist, although not at last year’s level given interest rates are likely to fall over time.”
Back in November, the firm lowered its core earnings margin forecast again after revenue fell over 18 per cent in the third quarter,
It said today that it was trading in line with the lower expectations.
The company also anticipates a like-for-like net revenue decline of around four per cent and an operational earnings margin in the range of 10-11 per cent for the full year.
Net debt is expected to be towards the lower end of the guided range of £180-220m, with circa £10 of merger payments delayed to 2024.
Sir Martin added: “After four years of very strong growth, 2023 was a difficult year impacted by volatile macro conditions and, consequently, cautious spending from clients, particularly those in the technology sector and from smaller project-based assignments.
“Our client relationships remain strong and we have also managed costs tightly.”