Martin Sorrell’s S4 Capital reports 28.1% hike in net revenue to £219 mn in Q1

Martin Sorrell’s venture, S4 Capital, has reported revenue and net revenue growth of 26.5% and 28.1% to £262 million and £219 million, respectively, for the first quarter of 2023. Like-for-like revenue and net revenue growth stood at 6.1% and 6.8%, respectively, primarily driven by Technology services.

Reported billings were up 26.5% at £455.9 million, and 10.4% like-for-like.

Content practice revenue was up 15.5% reported in the first quarter to £173.1 million, with like-for-like growth of 1.6%. First quarter net revenue was up 13.7% to £131.4 million reported and 0.8% like-for-like. The slowdown in growth reflects a strong comparator and a weaker addressable market in the period. Two year and three year net revenue stacks are 34% and 65%.

Data and digital media practice first quarter reported revenue was up 8.3% to £53.5 million and 0.6% like-for-like. First quarter reported net revenue was up 8.2% to £52.7 million and up 0.6% like-for-like. Like Content the practice saw slower growth in the period driven by a strong comparator and weaker market conditions. Two year and three year net revenue stacks are 35% and 71%.

Technology services practice first quarter reported revenue was up 368% to £35.1 million, 51.9% like-for-like. First quarter net revenue was up 414.7% to £35.0million, up 57.0% like[1]for-like. Activity with existing clients remained strong, with effective integration starting to drive net revenue growth. Two year and three year stacks, which include pre-merger periods are difficult to compile, but would compare very favourably with the industry leaders.

Commenting on the company’s performance in Q1 2023, Sir Martin Sorrell, Executive Chairman of S4Capital Plc, said, “We have had a solid start to the year, with net revenue rising 7%, while maintaining a focus on balancing growth in net revenue with costs, which is reflected in our people numbers remaining almost constant. Net revenue growth is pretty much in line with the Q1 constant currency growth of the major tech platforms, which averaged 6.4%. Two and three year like-for-like net revenue stacks are 41% and 74%. Technology services have led our growth in the first quarter, followed by Content and Data & digital media, reflecting the growing client focus on digital transformation.”

He further said, “We are immediately seeing positive impact in four areas – use of AI as a superpower or supertool to improve our people’s effectiveness; speeding up the creation of advertising content through faster copywriting and visualisation; hyper-personalisation at scale providing more empathetic advertising assets; and improved media planning and buying, particularly in digital improving targeting and optimisation and catering to client concerns around TV frequency capping and reach. The net effects of these developments will improve the effectiveness and efficiency of what we do – faster, better, more efficient, more and NOW!”