S4 Capital posts another disappointing year of negative growth

The wheels haven’t quite come off Sir Martin Sorrell’s S4 Capital although the veteran ad tycoon has reported another annual loss – £6m -rather better than last year’s £160m. Revenue was about £1bn, 5.4% down on the previous year. The company made around 1,000 job cuts.

Sorrell (above) says: “After our first four strong net revenue growth years, we had a difficult 2023 reflecting challenging global macroeconomic conditions, fears of recession and high interest rates.” and, of course, tech clients cutting back.

On a likely takeover (Stagwell made an offer last year) Sorrell says he hasn’t received a “credible offer” and the company is still “in charge of our destiny.”

Shareholders don’t seem quite so convinced as the shares in London fell 6% this morning, valuing S4 at a modest £226m, slightly more than M&C Saatchi and way behind the big ad holding groups that S4 once looked like challenging.

Perhaps the most disappointing thing for Sorrell is that S4, which was supposed to be more robust than its rivals because of its single-minded focus on digital, is that its fortunes actually seem more cyclical than the agency groups which straddle legacy media and digital.

Shareholders will be hoping for a cyclical upswing soon although S4 isn’t committing itself.