TIDMSFOR
RNS Number : 9528X
S4 Capital PLC
03 May 2019
3rd May 2019
S4 Capital plc ("S(4) Capital" or "the Company")
First Quarter Trading Update
Continued strong growth
S(4) Capital plc (SFOR.L), the new era digital advertising and
marketing services company, provides the following trading update
for the three-month period ending 31 March, 2019.
The group continued to deliver very strong growth in line with
expectations in the first quarter, at the level required to achieve
the group's three year plan of doubling its size organically on a
like-for-like basis. The group continues to trade in line with
budget and its objectives for 2019. The quarter one revised
forecast indicates revenue, gross profit and earnings before
interest, depreciation and amortisation growth above budget for the
year.
Reported revenue was up over 38% to GBP40.9 million and gross
profit up over 37% to GBP32.8 million. Like-for-like revenues and
gross profit, i.e. excluding acquisitions (there were none in this
reporting period) and in constant currency, were up 35% and 34%
respectively, reflecting the relative strength of the pound
sterling against the US dollar during the first quarter.
The group's digital content business, MediaMonks, representing
approximately two-thirds of total gross profit was up over 27% in
reported revenues and 22% in gross profit and up 25% and 20%
like-for-like.
The group's programmatic media planning and buying business,
MightyHive, representing the other third of total gross profit was
up 80% in reported revenues and 81% in reported gross profit, with
70% and 71% like-for-like.
Geographically, all regions showed very strong growth. The
Americas, representing 65% of total revenues, reported revenues and
gross profit up 31% and 31%, EMEA, representing 27%, up 41% and
38%, and Asia-Pacific, representing the remaining 7%, up 134% and
170%. On a like-for-like basis, the Americas were up 26% and 25%,
EMEA up 42% and 39% and Asia-Pacific up 130% and 169%.
Cash flow remains very strong, with net debt for the first
quarter running at an average of about GBP19 million, or
approximately half the level of the GBP44 million loan drawn down
to finance the combination with MediaMonks in July of last
year.
In the first quarter, new programmatic media planning and buying
offices were established in Tokyo and Montreal and coverage
initiated in Paris and Milan. After the quarter end, the group's
content offering was broadened and deepened by the acquisition by
MediaMonks of Caramel Pictures, the world's leading food and
liquids photographic and video studio and its programmatic media
planning and buying offer, by MightyHive's merger with ProgMedia, a
leading São Paolo-based programmatic consultancy, which expands
capabilities in Latin America.
S(4) Capital's first annual report was published on 29 April.
Both digital and analogue versions are accessible on the company's
website at www.s4capital.com.
Speaking from Singapore, where he was attending the opening of
the Company's first integrated digital content and programmatic
office, Sir Martin Sorrell, Executive Chairman of S(4) Capital
said:
"Client interest in, response to and engagement with the group's
first party data model driving and fuelling digital content
creation and programmatic media planning and buying have escalated
in the new year. Speed in all senses of the word is becoming a
crucial competitive advantage and differentiator and we don't have
to set up an Institute to learn that. We just listen.
The group is making progress in broadening and deepening
existing relationships, the largest of which will double in size
this year, and in establishing new ones. Notable new assignments in
the first quarter were with Procter & Gamble's Braun, Nestlé's
Starbucks(R) Coffee at Home, Mondelēz's Philadelphia, the creation
of content studios with Avon and Shiseido, and two major NDA
assignments with a major motor manufacturer and technology
company.
New business activity is frenetic and the pipeline is still at
twice the level of last year.
There is no doubt the faster, better, cheaper mantra resonates
and that clients want a unitary P&L approach from their
advisors. Clients are also increasingly willing to explore all
models - out-house, co-located, in-house - with the latter becoming
more and more fashionable, particularly as clients seek to take
back control, in a world where the walls of the walled gardens are
growing higher and the battle with the tech platforms to control
data and influence the direct to consumer relationship is key."
Reported Like-for-like
Q1 2019 Q1 2018 Growth Q1 2019 Q1 2018 Growth
(GBP'000) (GBP'000) (GBP'000) (GBP'000)
------------ ------------ ------- ------------ ------------ -------
Sector Revenue
Content 29,828 23,476 27% 29,828 23,771 25%
------------ ------------ ------- ------------ ------------ -------
Programmatic 11,098 6,163 80% 11,098 6,540 70%
------------ ------------ ------- ------------ ------------ -------
Total Revenue 40,926 29,639 38% 40,926 30,311 35%
------------ ------------ ------- ------------ ------------ -------
Sector Gross Profit
Content 21,726 17,744 22% 21,726 18,066 20%
------------ ------------ ------- ------------ ------------ -------
Programmatic 11,082 6,120 81% 11,082 6,495 71%
------------ ------------ ------- ------------ ------------ -------
Total Gross
Profit 32,808 23,864 37% 32,808 24,561 34%
------------ ------------ ------- ------------ ------------ -------
Geography Revenue
Americas 26,736 20,406 31% 26,736 21,136 26%
------------ ------------ ------- ------------ ------------ -------
EMEA 11,208 7,959 41% 11,208 7,881 42%
------------ ------------ ------- ------------ ------------ -------
Asia-Pacific 2,982 1,274 134% 2,982 1,294 130%
------------ ------------ ------- ------------ ------------ -------
Total Revenue 40,926 29,639 38% 40,926 30,311 35%
------------ ------------ ------- ------------ ------------ -------
Geography Gross Profit
Americas 22,610 17,316 31% 22,610 18,061 25%
------------ ------------ ------- ------------ ------------ -------
EMEA 7,824 5,668 38% 7,824 5,616 39%
------------ ------------ ------- ------------ ------------ -------
Asia-Pacific 2,374 880 170% 2,374 884 169%
------------ ------------ ------- ------------ ------------ -------
Total Gross
Profit 32,808 23,864 37% 32,808 24,561 34%
------------ ------------ ------- ------------ ------------ -------
Enquiries to:
S(4) Capital plc +44 (0)20 3793 0003
Sir Martin Sorrell, Executive
Chairman
Powerscourt (PR Advisor) +44 (0)20 3328 9386
Elly Williamson/Jack Shelley
About S(4) Capital
S(4) Capital plc (SFOR.L) is a new age/new era digital
advertising and marketing services company established by Sir
Martin Sorrell in May 2018.
Its strategy is to build a purely digital advertising and
marketing services business for global, multi-national, regional,
local clients and millennial-driven influencer brands. This will be
achieved initially by integrating leading businesses in three
areas: first party data, digital content, digital media planning
and buying, along with an emphasis on "faster, better, cheaper"
executions in an always-on consumer-led environment, with a unitary
structure.
Digital is by far the fastest-growing segment of the advertising
market. S(4) Capital estimates that in 2017 digital accounted for
approximately 40 per cent. or $200 billion of total global
advertising spend of $500 billion (excluding about $400 billion of
trade support, the primary target of the Amazon advertising
platform), and projects that by 2022 this share will grow to
approximately 55 per cent.
S(4) Capital integrated with MediaMonks, the leading,
Advertising Age A-listed creative digital content production
company, led by Victor Knaap and Wesley ter Haar, in July 2018, and
with MightyHive, the market-leading programmatic solutions provider
for future thinking marketers and agencies, led by Peter Kim and
Christopher S. Martin, in December 2018.
Victor, Wesley, Pete, Christopher and Peter Rademaker (formerly
Chief Financial Officer of MediaMonks, now Chief Financial Officer
of S(4) Capital), all joined the S(4) Capital Board as Directors.
The S(4) Capital Board also includes Rupert Faure Walker, Daniel
Pinto, Sue Prevezer and Paul Roy.
The company has a market capitalization of approximately GBP550
million ($720 million) and approximately 1,250 people in 16
countries, across the Americas, Europe, the Middle-East and Africa
and Asia-Pacific.
Sir Martin was CEO of WPP for 33 years, building it from a GBP1
million "shell" company in 1985 into the world's largest
advertising and marketing services company with a market
capitalization of over GBP16 billion on the day he left. Prior to
that he was Group Financial Director of Saatchi & Saatchi
Company plc for 9 years.
Neither the content of the Company's website, nor the content on
any website accessible from hyperlinks on its website for any other
website, is incorporated into, or forms part of, this announcement
nor, unless previously published by means of a recognised
information service, should any such content be relied upon in
reaching a decision as to whether or not to acquire, continue to
hold, or dispose of, securities in the Company.
This announcement includes "forward-looking statements". All
statements other than statements of historical facts included in
this announcement, including, without limitation, those regarding
the Company's financial position, business strategy, plans and
objectives of management for future operations (including
development plans and objectives relating to the Company's
services) are forward-looking statements.
Forward-looking statements are subject to risks and
uncertainties and accordingly the Company's actual future financial
results and operational performance may differ materially from the
results and performance expressed in, or implied by, the
statements. These factors include but are not limited to those
described in the Company's prospectus dated 4 December 2018 which
is available on the news section of the Company's website. These
forward-looking statements speak only as at the date of this
announcement. S(4) Capital expressly disclaims any obligation or
undertaking to update or revise any forward-looking statements
contained herein to reflect actual results or any change in the
assumptions, conditions or circumstances on which any such
statements are based unless required to do so.
No statement in this announcement is intended to be a profit
forecast and no statement in this announcement should be
interpreted to mean that earnings per share of the Company for the
current or future years would necessarily match or exceed the
historical published earnings per share of the Company.
This information is provided by RNS, the news service of the
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Authority to act as a Primary Information Provider in the United
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END
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