07:00 Mon 04 Nov 2019
S4 Capital PLC - Third Quarter Trading Update
("S4Capital", "the Company" or "the Group")
Third Quarter Trading Update
Accelerating Momentum
· Third quarter Revenue up almost 54% and 48% like-for-like
· Third quarter Gross Profit up 50% and over 44% like-for-like
· Year-to-date Revenue up over 46% and almost 42% like-for-like
· Year-to-date Gross Profit up over 46% and almost 42% like-for-like
· Third quarter Revenue and Gross Profit like-for-like growth rate faster than first half
· EBITDA operating margin improvement in third quarter
· Increasing key client account development and pitch activity
· Merger and asset purchase integration around content and programmatic practices proceeding well
· Company trading in line with internal and external expectations
The Group continued to progress with a very strong third quarter performance more than in line with its target of doubling organically in three years by 2021. Revenue was up almost 54% to
Year to date, revenue is up over 46% to
Both reported and like-for-like earnings before interest, depreciation and amortisation (EBITDA) operating gross profit margins at both the content and programmatic practices improved significantly in the third quarter. This was in line with the improvement indicated in the half-year results statement in September.
These figures include the impact of the two mergers with Progmedia in April and IMA in August and the asset purchase of Caramel Pictures in April. Subsequent to the third quarter end, the mergers with Firewood, Convergence Works and Datalicious Korea were completed at the end of October. The previously announced merger with BizTech is expected to be completed in early November.
Performance by Practice
Content practice revenue was up almost 48% in the third quarter to
Programmatic practice third quarter revenue was up over 71% to
Performance by Geography
The
Balance Sheet
Net debt averaged approximately
Client Development and Momentum
The company has made significant progress in deepening existing relationships and winning new accounts. Notable assignments were completed in the third quarter for AB InBev Brazil, Sony Pictures, Coca-Cola, HP and
Current Trading
The Group continues to trade in line with its forecasts and objectives for 2019. The Group has prepared its three-year plan for the period 2020-22 and preliminary budgets for 2020, which indicate continued progress also in line with its objectives.
The Company will shortly be making two further Non-Executive appointments to the Board, one based in
Sir
Key financials
£ million |
Reported |
Prior year* |
+/-% |
Like-for-like** |
+/-% |
|
Q3 2019 |
Q3 2018 |
|
Q3 2018 |
|
Revenue |
|
|
|
|
|
Content practice |
41.079 |
27.771 |
47.9% |
28.727 |
43.0% |
Programmatic practice |
15.553 |
9.086 |
71.2% |
9.539 |
63.1% |
Total |
56.632 |
36.857 |
53.7% |
38.266 |
48.0% |
|
|
|
|
|
|
Gross Profit |
|
|
|
|
|
Content practice |
26.614 |
19.018 |
39.9% |
19.682 |
35.2% |
Programmatic practice |
15.496 |
9.049 |
71.2% |
9.500 |
63.1% |
Total |
42.110 |
28.067 |
50.0% |
29.182 |
44.3% |
|
|
|
|
|
|
Gross profit by Geography |
|
|
|
|
|
|
28.491 |
18.870 |
51.0% |
19.901 |
43.2% |
EMEA |
9.654 |
7.649 |
26.2% |
7.698 |
25.4% |
|
3.965 |
1.548 |
156.1% |
1.583 |
150.5% |
Total |
42.110 |
28.067 |
50.0% |
29.182 |
44.3% |
|
|
|
|
|
|
|
YTD 2019 |
YTD 2018 |
|
YTD 2018 |
|
Revenue |
|
|
|
|
|
Content practice |
104.053 |
75.836 |
37.2% |
77.643 |
34.0% |
Programmatic practice |
40.551 |
23.154 |
75.1% |
24.373 |
66.4% |
Total |
144.604 |
98.989 |
46.1% |
102.016 |
41.7% |
|
|
|
|
|
|
Gross Profit |
|
|
|
|
|
Content practice |
71.829 |
53.812 |
33.5% |
55.128 |
30.3% |
Programmatic practice |
40.466 |
23.018 |
75.8% |
24.230 |
67.0% |
Total |
112.295 |
76.830 |
46.2% |
79.358 |
41.5% |
|
|
|
|
|
|
Gross profit by Geography |
|
|
|
|
|
|
75.903 |
52.050 |
45.8% |
54.566 |
39.1% |
EMEA |
26.451 |
20.865 |
26.8% |
20.810 |
27.1% |
|
9.941 |
3.916 |
153.9% |
3.982 |
149.6% |
Total |
112.295 |
76.830 |
46.2% |
79.358 |
41.5% |
* including the respective performance of mergers and an asset purchase in 2018, consolidated for the same number of months as included in 2019
** as for 'prior year', but on a constant currency basis
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For dial-in:
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Enquiries to:
S4 |
+44 (0)20 3793 0003 |
Sir |
|
Powerscourt (PR Advisor) |
+44 (0)20 3328 9386 |
|
|
About S4Capital
S4
Its strategy is to build a purely digital advertising and marketing services business for global, multinational, regional, local clients and millennial-driven influencer brands. This will be achieved initially by integrating leading businesses in three practice areas: first-party data, digital content, digital media planning and buying, along with an emphasis on "faster, better, cheaper" executions in an always-on consumer-led environment, with a unitary structure.
Digital is by far the fastest-growing segment of the advertising market. S4Capital estimates that in 2018 digital accounted for approximately 45% or
S4Capital combined with MediaMonks, the leading AdAge A-listed creative digital content production company led by
In
Victor, Wesley, Pete, Christopher and
Following the fundraising for Firewood, the company has a market capitalization of approximately
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