(Alliance News) - S4 Capital PLC on Monday reported a jump in revenue in the first half of 2021 as it identified ten more potential large client wins in the period.
The London-based digital marketing startup founded by WPP PLC veteran Martin Sorrell made interim revenue of GBP279.3 million in the six months to June 30, up 98% from GBP141.3 million a year prior. Revenue growth on a like-for-like basis was over 56%.
Shares were down 6.6% at 767.44 pence in London on Monday morning.
S4 Capital's pretax loss widened to GBP19.4 million in the six months ended June 30 from GBP1.0 million. Adjusting items of GBP47.4 million, up from GBP14.9 million a year earlier, drove the widened loss. Adjusting items including acquisition payments, amortisation and share-based compensation.
In addition, total operating expenses in the company more than doubled to GBP252.8 million from GBP122.6 million in the six-month period.
S4 Capital won significant business with existing "whopper clients" in the first half, including Alphabet Inc-owned Google and Facebook Inc. Whopper clients are those which represent more than USD20 million of gross annual revenue.
The company currently has five whopper clients, but has set a target of 20, with 10 potential clients already identified.
"We are clearly in a disruptive, growth sweet spot and our digital only, faster, better, cheaper, unitary, "holy trinity" model, which combines first party data with digital content, data and digital media is gaining traction, particularly in a cookieless world," commented Chair Martin Sorrell.
Sorrell added that the pandemic has accelerated the adoption of digital media, where S4 Capital's focus lies.
S4 Capital decided against paying an interim dividend, unchanged from 2020, but noted it continues to review the advisability of declaring a modest dividend in future.
"After only three years, on our third birthday as a listed company and with a market capitalisation of around six and a half billion dollars, which is well in to the top 125 FTSE companies, we are now in a position to build even stronger value-adding relationships with tech, healthcare, financial and FMCG clients amongst others," added Sorrell.
"The second half of 2021 and the prospects for 2022 look very good primarily driven by the fiscal and monetary stimulus, as well as the years beyond driven by digital transformation."
S4 Capital flexed its muscles in mergers and acquisitions throughout the period, snapping up Asia-based salesforce specialist Destined and Los Angeles-based marketing agency Cashmere, as well as merging its California-based media consultant MightyHive with Cashmere and one of its other agencies, MightyHive.
By Josie O'Brien; josieobrien@alliancenews.com
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S4 Cap. (SFOR)