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(Alliance News) - S4 Capital PLC said Monday it is trading "extremely well", with third quarter revenue and profit showing solid growth.
The digital advertising firm's total revenue in the three months to September 30 rose 53% year on year to GBP86.3 million from GBP56.6 million.
S4's Content revenue jumped 69% to GBP69.3 million, while Data & Digital Media revenue grew 10% to GBP17.1 million.
Gross profit in the third quarter improved 79% to GBP75.3 million from GBP42.1 million. Content profit more than doubled to GBP58.4 million, while Data & Digital Media profit improved 9% to GBP16.9 million.
Gross profit improved sequentially each month in the third quarter, up 18% in July, 24% in August and 25% in September.
Executive Chair Martin 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. Our consistent, very strong organic gross profit growth of almost 16% so far this year and almost 23% in the third quarter, indicates that we are well positioned in the digital sweetspot of an otherwise stagnant advertising and marketing industry and that clients are responding very well to our new age/new era, purely digital, 'holy trinity' model of first party data fuelling digital content, data & digital media."
Billings were GBP163.1 million up almost 13%, with "controlled" Billings at USD400 million.
S4 noted it ended the quarter with 2,870 staff, which is a 26% increase on the year before, as the advertising agency said it continues to "hire aggressively around strong gross profit growth and significant new business wins".
In the nine-month period, gross profit rose 78% year on year to GBP119.3 million, while revenue rose 58% to GBP227.7 million.
"The company recently developed a 20-2 client objective. That is, to develop twenty clients with more than USD20 million revenue per year, termed 'whoppers'. The company has made significant progress in deepening existing relationships and winning new accounts," S4 added.
Sorrell said: "We are optimistic about the macro prospects for 2021, particularly given the likely Global GDP rebound, the probability of further vaccine, therapeutic and testing developments, Tokyo 2021 and Euro 2021 and, at a micro level, the progress we have already made with major new client assignments in 2020. We plan further integration and combinations in 2021, which will reinforce our client appeal."
S4 said it continues to trade "extremely well", in line with its 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, when they were cut by 50% and no cash bonuses were taken for 2019, with effect from October 1," S4 added.
Shares in S4 Capital were 2.0% higher in London on Monday at 448.75 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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