29th Jul 2019 10:03
(Alliance News) - S4 Capital PLC on Monday said it is on track to double its revenue and profit over the three-year period, as it saw double-digit earnings growth in the first half of 2019.
The stock was trading 4.1% higher on Monday in London at 157.74 pence a share.
S4 Capital was formed by Martin Sorrell in May 2018, shortly after his departure as chief executive from WPP PLC on allegations of misconduct.
The digital advertising and marketing services company said like-for-like revenue and gross profit were up 40% in the six months to the end of June. Thus, the company said it is on track to double its revenue and gross profit organically over the three years to 2021.
Less positively, S4 Capital said its pro-forma reported operating earnings before interest, taxes, depreciation, and amortization margins were lower than last year, reflecting increased human capital investment and geographical expansion, both at MediaMonks in digital content and MightyHive in programmatic.
Th company explained that the increased human capital investment resulted in doubling of its like-for-like headcount during the period.
"The continued top-line revenue and gross profit momentum at twice the digital market's growth rate clearly demonstrates the contemporary relevance to clients, of the purely digital, 'faster, better, cheaper', unitary, first party data, content and programmatic model," said S4 Capital Executive Chair Sorrell.
"We are investing in human capital and new geographies at a faster than anticipated rate, to take our 'holy trinity' model to the next level and this has flowed through to operational Ebitda margins in the first-half and we expect margin expansion in the second half of the year," added Sorrell.
S4 Capital said it will report its interim results on September 11.
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