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Financial Results S4 Capital Agency Models

S4 Capital posts 19.4% rise in like-for-like gross profit as it swallows up Jam3


By John Glenday, Reporter

March 25, 2021 | 4 min read

Martin Sorrell’s S4 Capital has pleased the markets with a 60% jump in revenue to £342.7m in its second full year of trading, equivalent to a 15.2% hike on a like-for-like basis. The former WPP chief toasted the preliminary results for 2020 as ”outstandingly successful” and says 2021 is off to a flying start with like-for-like gross profit growth for the year ahead expected to weigh in at 25%.

S4 Capital

S4 Capital posts 19.4% rise in like-for-like gross profit as it swallows up Jam3

S4’s results in numbers

  • S4’s preliminary 2020 results make for pleasant reading for investors, with gross profit of £295.2m – an impressive 72% rise on the year before.

  • This comes on top of a 86% increase in operational EBITDA to £62.2m – a boost of 18% on a like-for-like basis. Billings clocked in at £653.4m and pro-forma billings stood at £768.4m.

  • The figures provide ample reward for a lean period of building brand awareness through 2019 as the fledgeling business set about converting client relationships into hard revenue.

  • That patience has now paid off with Sorrell claiming to have secured, or to be on the cusp of signing, five ’whoppers’ – a term he uses for high profile clients that generate over $20m in revenue a year.

  • Unsatisfied with progress thus far, Sorrell has set his sights on securing no less than 20 ’whoppers’ as part of S4’s ’20 squared’ objective.

  • The results are all the more impressive for shrugging aside the impacts of Covid-19, with S4 Capital able to buck the trend by pushing through a series of mergers such as that between MediaMonks and Circus Marketing.

More leaps and a new merger

  • Alighting on the key factors behind this rapacious growth, Sorrell said: ”We continued to grow our top line and bottom line at industry leading rates, despite Covid-19, and exhibited agility in developing new content revenue streams quickly, such as robotic production, animation and on-line events and driving data and digital marketing net revenues, particularly in the fourth quarter and into this year.”

  • Growth has also been turbocharged by multiple mergers and acquisitions, such as data and digital media specialists MightyHive and Digodat, Lens 10, Orca Pacific and BrightBlue Consulting.

  • Looking ahead, Sorrell spies further riches on the horizon with a rapacious appetite for further short-term opportunities remaining undimmed.

  • Sorrell continued: ”2021 has started strongly, well in line with our latest three-year plan to double organically, and we are focused on three objectives for the year – to bed down our two new ’whoppers’ and develop and identify five more; to roll-out our unitary branding; and to continue to broaden and deepen our digital client offering by combination. We believe 2021 and 2022 will be very strong years economically as the world rebounds from the pandemic and spends and invests the huge pandemic-driven fiscal and monetary stimulus.”

  • The latest example of S4’s breakneck evolution comes courtesy of digital agency Jam3, which is to merge with MediaMonks to further reinforce its creative and content chops.

  • Founded in 2004, Jam3 employs 150 people from four international offices and boasts an enviable client roster including the likes of Facebook, Adidas and Levi’s.

  • These join a further seven new clients added to S4’s books in 2020, namely BMW/Mini, Cisco, PayPal, Embibe, Pokemon, Harley Davidson and St Jude’s Children Hospital.

Financial Results S4 Capital Agency Models

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