‘Unacceptable and embarrassing’: Sorrell criticises S4 Capital results delay

S4 Capital’s founder and executive chairman Martin Sorrell has described the twice-delayed reporting of the 2021 preliminary financial results of his digital advertising firm “embarrassing and unacceptable”.

Last month, Sorrell had more than £90 million (A$157 million) wiped off the value of his S4 Capital stake after PwC refused to sign off its Preliminary Results for 2021.

S4 Capital chair, Sir Martin Sorrell (pictured)

“The delay in producing our 2021 results is unacceptable and embarrassing,” Sorrell said to analysts and investors in a presentation last week.

Sorrell explained the reason for the delay included significant changes in financial control, staff turnover and lack of detailed documentation.

Despite the delay, S4 Capital’s 2021 results were healthy. Billings increased to £1.3 billion (A$2.2 billion), up 99.4%, and up 66.8% like-for-like.

Revenue was up 100.4% to £686.6 million (A$1.2 billion), up from £342.7 million (A$ 600,000), like-for-like up 52.4%.

Sorrell said the growth, both organic and through business combinations, was “very satisfying”.

He commented: “In our third full financial year we almost doubled in size, approximately half through organic growth and approximately half through combinations and generated over $900 million of revenue in 33 countries.

“We continue to grow our top line at industry leading rates, despite Covid-19, and have exhibited agility in developing new content revenue streams quickly, in such areas as the Unreal Engine,  the Metaverse, blockchain, crypto and NFTs placing us at the forefront of these significant disruptions. 

“We continued to broaden and deepen our Content and Data&digital media practices through organic growth and by the addition of a further five Content, four Data&digital media and one Technology services companies in 2021 and one so far in early 2022, in the Data&digital media practice.”

He added: “As a result, we broadened our services capabilities by expanding into the third practice area – Technology services – enabling us to engage more deeply with CIOs and CTOs in addition to CMOs, Chief Sales Officers and CDOs.

“We further integrated our unitary client offering around our Content, Data&digital media and Technology services practices, with the launch mid-year of one operating brand, Media.Monks, which celebrated our roots in both Content (MediaMonks) and Data&digital media (MightyHive) and embodied sufficient flexibility to engage our entrepreneurial talent.”

The Group now has over 8,400 people in 33 countries, trending towards double where we were at this time last year.  

2021 saw the expansion of its major client relationships with additional remits and geographies at brands including Google, Meta, Amazon, Paypal, HP, Netflix, Procter & Gamble, Mondelez and BMW. We also saw significant new business with engagements from new clients including Allianz, Miele, Instacart, Pearson, Dropbox, Canva, Constellation Brands and M1. 

S4 Capital’s current client activity pipeline is running at a stronger level than last year.

S4 Capital currently trades at £357.80 (A$624.68) as of 9 May 2022, and has a market capitalisation of £1.810 million. (A$3.1 million).

Unaudited consolidated statement of profit or loss for the year ended 31 December 2021.


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