Sorrell’s new S4 Capital posts promising first year numbers

Sir Martin Sorrell’s S4 Capital has released its first full year results, for 2018, which appear to show the new entity is motoring nicely. S4 includes Dutch (now international) production company MediaMonks, acquired in July last year, and programmatic media company MightyHive, bought in December.

Billings in 2018 were £59.1m, £291.2m had the two companies been part of S4 for the duration. S4 says the latter pro-forma revenue for the year would have been £135.9m for the year with gross profit of £105.2m. There’s also red ink, as you’d expect from a start-up, with an operating loss of £8.5m.

Sorrell says: “It is clear that the Company’s purely digital model based on first party data fuelling digital content and programmatic is resonating with clients. Our tag line “faster, better, cheaper” and unitary, one P&L structure also appeal strongly. The imperatives will be to broaden and deepen relationships with existing and new clients; to broaden and deepen geographical coverage; and to attract additional data, content and media talent and resources through direct recruitment, acquisition and/or merger.”

S4 has already opened in India and increased its presence in Europe. MightyHive is US-based. So the WPP founder and former CEO can be pleased with his first year as a rival to his former company.

At some stage this year he will need to do another big deal and so-called “first party data” seems to be top of the list. The possessors of such goodies tend to be expensive though. Any company building by acquisition is always vulnerable to making the wrong call. Sorrell’s WPP almost came unstuck when it bought Ogilvy & Mather in 1989 for $864m only to be confronted with a global downturn.

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