Pune Media
Leading the news curation and publishing for the people of Pune

S4 Capital sees losses jump as takeovers and hiring boom weigh on group’s costs

Sir Martin Sorrell’s S4 Capital sees losses widen to £82m as takeovers and hiring boom weigh on group’s costs

  • Sir Martin Sorrell’s business reported a loss of £82.4m for the first half of 2022 
  • S4 Capital said it had frozen recruitment and put controls on discretionary costs
  • The prominent posted a net debt of £135.5million 

S4 Capital has seen losses accelerate following a steady stream of acquisitions and an increase in staff numbers.

Sir Martin Sorrell’s advertising business reported a loss of £82.4million for the first six months of 2022, compared to a £23million loss last year, as investment in staffing outpaced growth in net revenues.

S4 announced that it had implemented a freeze on recruitment and controls on discretionary costs, which is having the ‘desired effect’ of keeping the total headcount at around 9,100 over the past month.

Titan: Sir Martin Sorrell’s business reported a half-year loss of £82.4million as investment in hiring outpaced the growth in net revenues more than expected 

That is still almost 60 per cent more people than were working for the company at the end of June 2021, when its total net cash stood at £6.6million.

Twelve months later, the group posted a net debt of £135.5million due to the heavy level of mergers and takeovers it has completed this year, including one involving Los Angeles-based software developer TheoremOne.

These deals still helped total sales over the recent half-year period climb by 59.8 per cent to £446.4million and billings jump by nearly 40 per cent to £765.6million.

S4 Capital also won new contracts with major corporate clients, such as pub chain Brewdog, computer software provider Adobe and social media platform TikTok.

On top of this, it gained two so-called ‘whopper’ contracts, each worth at least $20million per year, which are planned to become fully operational in 2023.

The London-listed firm said it has another five clients with deals close to achieving ‘whopper’ status, while another 14 have been identified as ‘potential whoppers.’

Despite an economic climate of interest rate hikes, rising inflation and slowing growth, Sorrell said the present moment could represent a windfall for the advertising sector.

He said: ‘The prospects for digital advertising and transformation remain relatively bright, whilst traditional media languish, and there is evidence that demand accelerates during periods of economic uncertainty as we saw with Covid in 2020 when we performed strongly.’

Sorrell, 77, began S4 Capital four years ago after leaving WPP, the agency that he helped set up and transform into the world’s largest advertising business. 

His new firm has undergone a rapid expansion, buying up 30 media organisations since it was founded and winning clients like technology giants Google and Meta,  Cadbury owner Mondelez and German carmaker BMW.

S4 Capital shares had soared by 11.1 per cent to 159.5p by late Wednesday afternoon, although their value has declined by around 60 per cent in the last 12 months.  





Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.

Aggregated From –
Comments
Loading...

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More