Sir Martin Sorrell’s S4 Capital enjoys boost in profits as it eyes up more ‘whopper’ clients
The company reported its gross profit and net revenue reached £250m in the three months to September 30, up 73 per cent on a reported basis from the £144m posted this time last year.
Revenues also surged by more than two thirds on a reported basis, from £178m last year to £300m in the latest quarter.
Sir Martin said that the firm has kept up momentum despite political and economic “gloom” and a slowdown in growth across the technology sector.
It recorded a particularly strong performance in the Americas, where reported gross profits grew by 89 per cent, but slower growth in Asia Pacific which was primarily affected by China’s zero-Covid policy, the group said.
Sir Martin said that S4 has 10 “whoppers” in sight, which refers to big clients worth more than 20 million dollars in revenue per year, and is well on its way to reaching its long-term goal of 20.
It added that the average size of its top 50 clients has grown 70 per cent year-on-year.
Sir Martin told investors that his firm is well placed to meet its clients’ marketing and advertising needs as recessions in parts of the world become more likely.
He said: “Despite the current macro political and economic gloom and slowing tech growth, our top-line momentum has been more than maintained in the third quarter and remains relatively strong into the fourth quarter.
“Given the reduction in global gross domestic product (GDP) growth rate forecasts for 2022 and 2023 and the likelihood of recession in some parts of the world, clients will be moving ‘down the funnel’, as we say, prioritising performance and activation, measurement of marketing ROI and media mix modelling, which plays to our strengths.
“We believe this changing market environment will continue to offer significant growth opportunities given our client profile, relative size and disruptive model.”
The former WPP boss founded the company in 2018 and it has around 8,950 employees in 32 countries. The company said it expects operational earnings for 2022 to reach around £120m, in line with previous expectations.
Last year, S4Capital announced a merger between its subsidiary MediaMonks and creative production studio Staud Studios. The German company was founded in 1983 and focuses on the automotive industry, working with some of the world’s biggest car brands.