S4 Capital Q1 Results Update

S4 Capital has reported a Q1 update that is better than our forecast, with a LFL net revenue decline of -11.7% against a tough comparative compared with DCe -13.0%, and we maintain our FY24E estimates.

S4 Capital Q1 Results Preview

S4 Capital will report Q1 results on Friday, 10th May. Q1 has a tough comparative this year as last year was strong at +7% before growth slowed in Q2 and then turned negative in H2. We forecast a -13% LFL decline in Net Revenues to £190m and expect a similar fall in Q2 before a flattening in H2 as comparatives ease.

S4 Capital - Extension of recovery horizon

S4 Capital had a difficult FY23, as flagged, with reduced client confidence and spend, particularly from those clients in the tech sector, and on larger transformation projects. Management is cautious in the short term, with no substantive changes likely in H124, but sees conditions likely to improve in H224 as economic pressures ease. The group’s longer-term prospects should be buoyed by its positioning across data and digital marketing and, in particular, in incorporating AI into hyper-persona

S4 Capital FY23 Results Update

S4 Capital reported FY23 EBITDA of £93.7m vs DCe £89.6m and we retain our lower end 2024 forecast for £90.2m.

S4 Capital FY23 Results Preview

S4 Capital will release FY23 results on 27th March. We maintained our EBITDA/EPS estimates of £90m/4.7p at the January update which are predicated on a LFL net revenue decline of -4% and EBITDA margin of 10.3%, with the latter supported by the c20% reduction in headcount.

LIBERUM: Agents of change: Evolving for modern demands

S4 Capital FY23 Trading Update

S4 Capital has reported a FY23 Trading Update which states that trading was in line with expectations and debt is at the lower end of guidance.

S4 Capital Q3 Trading Update

S4 Capital has reported Q3 revenues below expectations and lowered FY guidance; we reduce our FY LFL growth by -150bp to -3% and EBITDA margin to 10% (was 12%).

Efficiency, Returns and Alignment

At its recent results, S4 Capital indicated its key focus will be to improve efficiency and drive shareholder returns.

Interim results

S4 Capital has released interims that are in line with the July Trading Update though the group cautions that trading has become more challenging and it lowers its LFL guidance from +2-4% to ‘likely down' and EBITDA margin from 14.5-15.5% to 12.0-13.5%.

Feedback from Digital Disruption Conference

On 12th September, Dowgate Capital and FTI Consulting held the third annual Digital Transformation Conference. In a wide-ranging conversation with Rory Cellan-Jones, Sir Martin Sorrell gave an overview of the geopolitical outlook and the opportunities from digital technologies, notably generative AI.

Pre-close Trading Update

S4 Capital has released an H1 Trading Update that indicates slower LFL growth has resulted in EBITDA and margin being below budget and has lowered FY guidance from LFL growth of 6-10% to 2-4% and Margin from 15-16% to 14.5-15.5% and we therefore reduce our EBITDA and EPS forecasts by -9% and -11%, respectively.

Feedback from Generative AI seminar

S4 Capital held a seminar on Generative AI which reproduced the content from conversations that it had with clients at last week's Cannes Lions Festival of Creativity in which it highlighted its determination to ‘go all in' on AI and be ‘first and fastest'.

AGM Statement

S4 Capital has released an AGM statement which confirms that trading remains in line with expectations and consistent with the recent Q1 update.

Q1 Trading Update

S4 Capital has reported Q1 net revenues of £219m, slightly ahead of DCe £209m, with LFL growth of +7% (+8% ex-Mondelez) and has reiterated its FY guidance for 8-12% growth and EBITDA margins of 15-16%.