Sorrell reveals more fruits of his $1bn S4C labours

Sir Martin Sorrell says his S4Capital has morphed into a pumpkin from a peanut (maybe biology’s not his thing) as it reports organic growth of over 40 per cent this year in a third quarter trading update. He says: “Our very strong organic growth of well over 40 per cent, so far this year, indicates that clients are responding very well to our purely digital, unitary, ‘holy trinity’ model of first party data fueling digital content and programmatic.

“As our new content and media partners, Firewood, based in Silicon Valley put it, ‘speed, quality and value’ are key. The mergers and asset purchase we have completed, so far this year, will broaden and deepen our capabilities and client relationships and convert clients to scale. The peanut has morphed into a pumpkin in time for Halloween 2019 and we have also achieved US$ Unicorn status (a valuation of $1bn.)”

In Q3 S4C’s Revenue was up almost 54 per cent to £56.6 million and gross profit up 50 per cent to £42.1 million. Like-for-like revenue and gross profit (including-impact of mergers, asset purchase and in constant currency) were up 48 per cent and over 44 per cent respectively.

Year to date revenue is up over 46 per cent to £144.6 million and gross profit up over 46 per cent to £112.3 million. Like-for-like revenue and gross profit were both up almost 42 per cent.

It seems undeniable that S4C is growing rapidly and profitably, albeit from a small base. How much of a threat it is to established marcoms and ad holding companies is difficult to assess. Its logical rival is Accenture Interactive and that has revenues of $8bn plus (Accenture as a whole is over $40bn.)

But Sorrell has undoubtedly found and grown a niche market.

Would WPP be enjoying some of this if he’d stayed and bought MediaMonks, the foundation of S4C?

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Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.