S4 Capital revenue crosses £1bn for the first time; Sorrell ‘cautiously optimistic’ despite ‘slowdown’
Sir Martin Sorrell’s S4 Capital has posted its earnings for the full year ended December 2022. In line with the estimate in its fourth-quarter trading update, the group posted a 26% net revenue like-for-like growth.
The net revenue was £891 million (A$1.64 billion) in 2022. The overall revenue crossed £1 billion for the first time (£1.06 billion or A$1.95 billion) this year, up 24.3% year-on-year (YoY) on a like-to-like basis.
Sorrell, who is the executive chairman of the company, said: “We have momentum going into 2023 and are cautiously optimistic, despite the slowdown of growth in our major addressable markets.
“We expect to make continued progress, stimulated, in particular, by the early and rapid implementation of revolutionary new technologies such as AI.
The Operational EBITDA (earnings before interest, taxes, depreciation, and amortisation) was £124 million ($228.81 billion), down 16.4% YoY on a like-to-like basis. The Operational EBITDA margin decreased to 13.9% in 2022 from 18% in the previous corresponding period.
Operating loss was £135.3 million (A$249 million), after £249.4 million (A$460 million) of primarily combination-related expense, being payments linked to continued employment and the associated expenses and amortisation totalling £229.8 million (A$424.1 million).
Net debt ended the period at £110.2 million (A$203.3 million), lower than the previous guidance of £130-170 million.
The group went through an auditing delay for its 2021 preliminary results, which caused its share price to crash. Sorrell later labelled the incident as “unacceptable and embarrassing”.
S4 Capital’s share price at its previous close on Friday was £161.4 (A$297.87). It has a market cap of £936.92 million (A$1.72 billion) on Monday.
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Darcy Song was a reporter at Mumbrella, covering media owners, adtech and social platforms. She left in October 2023.
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