S4 Capital PLC plans a significant expansion after trading in line with expectations in the third quarter of 2018.
S4 Capital is an advertising and marketing services investment company set up earlier this year by Martin Sorrell soon after departing under a cloud from WPP PLC, the advertising giant that he founded and led as chief executive. In July, S4 Capital bought Netherlands-based advertising firm MediaMonks Multimedia Holding BV for an undisclosed sum, after winning the bid over WPP.
S4 Capital reported revenue in the three months to the end of September of EUR29.3 million, up 45% year-on-year, and gross profit of EUR20.4 million, up 32%. On a like-for-like basis, excluding acquisitions and in constant currency, revenue rose by 46% and gross profit by a third.
For the year-to-date, revenue grew by 48% to EUR83.4 million and gross profit improved by 40% to EUR59.7 million. Like-for-like revenue and gross profit were up 54% and 45%, respectively. All the operating figures relate to MediaMonks, currently S4 Capital’s only trading company. It divides its business into three components: creative content & innovation, assets at scale, and platforms & e-commerce.
Scale divised-assets, focuses on asset production across programmatic advertising, delivered a doubled gross and net revenue in the third quarter and year-to-date, the company highlighted. This performance reflects the growth seen in global digital advertising.
Platforms and e-commerce unit, focuses on the development of websites, also grew strongly in both the third quarter and year to date. Geographically, S4 Capital said the US showed very strong growth in the third quarter and year-to-date. The company added an office in San Francisco in the fourth quarter to the two existing offices in the US to further service its growing technology client portfolio, it explained.
Also Europe grew significantly in the third quarter and year-to-date, the company highlighted, with the UK performing particularly strong. Looking forward, S4 Capital said it will expand its operations significantly in Asia Pacific, Latin America, the Middle-East and Africa in 2019.
Executive Chairman Sorrell commented,
Trading is very much in line with our objectives for this first quarter since the merger with MediaMonks. We already see both a widening and deepening of the company’s client base, resulting in a strong performance for all three pillars at MediaMonks. We are already planning significant expansion of the group’s services in digital media planning and buying and content and geographically, particularly in the US and Asia Pacific.
S4 Capital shares were up 2.0% throughout the month, at 115.78 pence each.