30th May 2022 13:27
(Alliance News) - The strong start S4 Capital PLC made to the year has helped restore some of the damage to its reputation following the delay of its annual results, according to AJ Bell.
S4 Capital on Monday reported a performance in the first quarter of 2022 ahead of its guidance to the market, with a double-digit jump in revenue reinforcing a confident outlook.
The stock was up 3.5% at 295.40 pence on Monday afternoon, but is down nearly 50% over the past year.
For the three months ended March 31, the London-based advertising and marketing agency posted gross profit at GBP171.1 million, up 65% from GBP104.0 million the same period a year before.
On a like-for-like and pro-forma basis, gross profit was up 35%.
This was on revenue which grew 70% to GBP206.0 million from GBP121.6 million, and rose 41% on a like-for-like and pro-forma basis.
Looking ahead, S4 maintained its guidance for a 25% rise in like-for-like gross profit and revenue for 2022, as new business activity remains strong, while the group's pipeline is larger than it was at this time a year prior. For 2021, gross profit stood at GBP560.3 million, on revenue of GBP686.6 million.
AJ Bell's Russ Mould commented Martin Sorrell's digital advertising company "went some way to repair the damage its credibility caused by delayed full year results earlier this year".
S4 had delayed publication of the results twice back in March, after its auditor PricewaterhouseCoopers was unable to complete the work.
"For now, the business seems to be unaffected by any slowdown in spending on online ads – something which has been reflected in updates from Google-owner Alphabet and, more recently, the owner of the Snapchat social media platform Snap," Mould said.
"S4 remains a business with lots of moving parts having grown rapidly through acquisitions and, reflecting lingering scepticism about the business, its shares are still down more than 50% over the last year," he added.
By Arvind Bhunjun; [email protected]
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