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(Alliance News) - S4 Capital PLC on Monday said it has seen an "acceleration" in the second quarter of 2021, lifting its net revenue guidance, and also noted it has terminated several office leases.
Speaking at the company's annual general meeting Monday, Executive Chair Martin Sorrell said: "2020 was a very busy third year for S4 Capital, both organically and through mergers, and the tempo has been maintained, as growth rates have accelerated."
The London-based digital advertising agency now believes net revenue growth in the first quarter of the financial year will be 35%, compared with previous expectations of 30%.
The move follows a similar uplift in forecasts in May, where the figure was raised from 25% to 30%.
In the first four months of 2021, reportable revenue was up almost 90% compared with a year ago, with particular acceleration in April as vaccine rollouts picked up globally.
Sorrell said: "We do not have our May figures as yet, but early indications are that May will be similar to April, and that in June the pipeline continues to be robust."
Tech clients, which make up more than half of S4 Capital's revenues, are outspending consumer goods, pharmaceutical and retail clients, he added.
To capitalise on the accelerated growth, S4 said it is looking to raise a term loan of over USD350 million to finance further expansion.
The advertiser has made 11 takeovers in the past 12 months.
"All these mergers have historically been branded under the MediaMonks and MightyHive banners and, in turn, MediaMonks and MightyHive have been increasingly and already successfully acting as one in going to market. The combined firm will, in future, go to market under one brand or flag," Sorrell said.
S4 said it is confident of high double digit like-for-like revenue and gross profit growth for 2021.
S4 Capital reported revenue of GBP342.7 million and a pretax profit of GBP3.1 million in 2020.
The firm also noted it is shutting several offices - as staff are being encouraged to adopt flexible hybrid working practices.
"We always knew that our people, being digital natives, would adapt effortlessly and productively to working from home and, as a result, we are further developing a hybrid office model, which accommodates those of our people who want to work more from home and who want to commute more flexibly, and provides spaces for working, interacting with colleagues and interacting with clients," Sorrell said.
He continued: "We have terminated a number of office leases, which will enable us to integrate our operations even faster than we originally thought."
Shares in S4 Capital were 4.8% higher in London on Monday at 615.13 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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