How is Sir Martin Sorrell’s new company S4 Capital doing in these trying times?
Its top line figures remain spectacular: It now bills £455.8m with reported revenue up 292 per cent year on year from £54.8m to £215m, gross profit of £171.3m up 361 per cent from £37.2m in 2018 (not a full year.)
But for the second year it posted a loss of £9.2m against £9.1m the year before, no great surprise when it’s grown so fast through acquisitions, chiefly content business MediaMonks but also programmatic media buying operation MightyHive and various smaller digital entities.
It now employs 2500 people around the world.
But its net cash has reduced to £23.7m even including the £42m “loan” used to fund acquisitions. Mark cap is currently around £600m compared to the £1bn “unicorn” status it briefly touched. So it’s a mixed bag.
CEO Sorrell (never knowingly undersold) says: “Our first full financial year was outstandingly successful. We grew our top line and bottom line at industry leading rates. We broadened and deepened our content and data and programmatic practices through organic growth and the addition of six content and three digital media and data companies.
“We integrated our client offering around our content and data and programmatic practices. We broadened and deepened our client roster. We achieved $ and £ Unicorn status in terms of stock market value. We have achieved brand awareness and brand trial. We now have to demonstrate that we can achieve significant client conversion at scale, both with existing and new clients.
“We have not seen a material impact from Coronavirus as yet and will update the market appropriately.”
So it’s all to play for and if S4 wants to keep growing by acquisition it will need to raise more money. Not easy with the dreaded Coronavirus around and restrictions on travel which must be reining in even the globe-trotting Sorrell.
In many ways S4 is a mighty testament to Sorrell’s business-building abilities. But the hardest work starts now, persuading the world’s biggest clients (currently running scared for virus reasons) that it can be more than niche digital provider.