Sorrell’s S4 Capital closes gap on giants Accenture and WPP

Sir Martin Sorrell’s S4 Capital motors on happily through the pandemic, reporting Q3 2020 revenue of £86.4m (up 13% on the same period of last year) and gross profit of £75.3m (up 23%.)

All this without the benefit of BMW’s European account (via an entity called The Engine, mostly provided by S4), the third win of what Sorrell calls “whoppers” – accounts bringing in $20m revenue or more – after Google and an unnmamed tech company. Year to date billings rose to £424m, up 12% and the company now employs nearly 3000 people worldwide.

Other client wins over the quarter included T-Mobile, Klarna, Shopify and Beyond Meat. S4 shares rose four per cent valuing the company at £2.4bn.

Executive chairman Sorrell (above) says: “We continue to trade in line with ambitious internal and external targets, which now include doubling both top and bottom lines organically over the period 2021 to 2023.”

“Our consistent, very strong organic gross profit growth indicates that we are well positioned in the digital sweetspot of an otherwise stagnant advertising and marketing industry and that clients are responding very well to our new age/new era, purely digital, ‘holy trinity’ model of first party data fuelling digital content, data and digital media.”

S4’a overall numbers will continue to grow as these don’t include a number of recent smaller acquisitions. The issue now for Sorrell and his team is whether to stay with the same successful policy – building the company around content agency MediaMonks and programmatic outfit MightyHive – or aim for another big leg of the business.

Sorrell said in an interview recently that he saw his main rival as Accenture Interactive, valued at around £8bn. His former creation WPP is also valued at £8bn. The temptation is obvious.