S4 Capital PLC (LSE:SFOR) on Monday said trading in the fourth quarter of 2023 was in line with the reduced expectations outlined in November.
Sir Martin Sorrell’s advertising agency endured a difficult year in 2023, forcing it to lower guidance more than once.
Executive Chair Sorrell said that trading was hit by “volatile macro conditions and, consequently, cautious spending from clients, particularly those in the technology sector and from smaller project-based assignments. “
He doesn’t expect 2024 to show macro-economic improvement, and client caution on marketing spend “will likely persist,” although not at last year's level.
“Initial indications are for an improvement in performance in the Content practice, reflecting cost reductions, broadly similar performance in Data&Digital Media to last year and a more challenging outlook for Technology Services,” he added.
For full-year 2023, it anticipates a like-for-like net revenue decline of around 4% and an operational Ebitda margin in the range of 10-11% for the full year 2023.
S4 Capital said operational Ebitda margin performance improved in the second half of the year as a result of significant cost reductions.
Net debt is expected to be towards the lower end of the guided range of £180-220 million, with circa £10 million of merger payments delayed to 2024.