15th Jul 2020 17:57
(Alliance News) - S4 Capital PLC said Wednesday it is planning a GBP100 million raise and is confident of double-digit like-for-like revenue and profit growth in 2020.
The digital advertising & marketing services firm said it is planning the GBP100 million raising - with all directors expected to participate - to "provide flexibility and firepower" to fund further acquisitions.
S4 noted its directors will subscribe for at least GBP21 million with Executive Chair Martin Sorrell subscribing for GBP8 million.
Sorrell said: "In line with our mantra of 'faster, better, cheaper', now is not the time to slow down. We believe that it is precisely the time to quicken the development of our capabilities around digital transformation, accelerated by the pandemic.
"We have a great team in place, as good as I have seen anywhere, eager to create new and exciting ideas for our clients. We, therefore, want to ensure that the company has the necessary flexibility to capitalise on opportunities as they arise."
Turning to trading S4, May's like-for-like gross profit was up "almost" 5%, with year-to-date like-for-like gross profit up over 12%.
The company believes April will be the "trough month", with momentum rising in June and through the rest of the second half.
"As a result of this heightened momentum, the company remains confident of delivering sector leading, double digit like-for-like revenue and gross profit growth for 2020, along with a reasonably strong operating earnings before interest, taxes, depreciation and amortisation margin," the company said.
S4 continued: "The company also continues to believe it has a fighting chance of achieving the pre covid-19 three-year plan for 2020 to 2022, which calls for a doubling of the company organically, at both top line and Ebitda levels."
The company has also expanded its revolving credit facilities with Barclays, Credit Suisse and JPMorgan to commit EUR43.5 million to its existing HSBC facility of EUR85 million.
Shares in S4 Capital closed 0.6% higher in London on Wednesday at 315.00 pence each.
By Paul McGowan; [email protected]
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