Hopes and dreams of a Martin Sorrell redemption arc took another hit this week when his advertising firm S4 Capital PLC (LSE:SFOR)’s valuation was whacked by 11.5% following a dreary trading update.
The group saw net revenue fall by more than 15% year on year in the first half, with adjusted earnings falling 17.5% to £30 million.
Losses for the period improved from £21.8 million to £13.7 million due to a combination of opex savings and lower share-based compensation.
Yet net debt on the balance sheet rose dramatically- from below £110 million in the first half of 2023 to more than £182 million in the latest period.
Sorrell said trading reflected “the continuing impact of both challenging global macroeconomic conditions and high interest rates”.
Sorrell established S4 Capital in 2019 following an acrimonious split from WPP PLC (LSE:WPP), the world’s largest advertising firm that he founded in the early 70s, after facing allegations of personal and financial misconduct.
S4 Capital’s shares are plumbing all-time lows of 42p each.
Market rollercoaster
The junior market had a bit of a journey this week.
Stocks traded broadly flat until a chunky 50-point interest rate call from the US Federal Reserve, coupled with a hold on rates from the Bank of England, injected some bullishness into the market.
AIM then tailed off on Friday in response to a worryingly low GfK consumer confidence print. The index ultimately entered the final stretch of the week flat at 746 from the Monday open.
The FTSE 100 blue-chip index trended similarly, closing flat at around 8,270.
More risers and fallers
TT Electronics PLC (LSE:TTG) shares fell by 10% this week in response to a trading update from the engineering and manufacturing company.
Due to a decline in order intake from TT Electronics’ North America-based customers, the group conceded that second-half revenue is now expected to be £15-20 million lower than previously anticipated.
It blamed "operational efficiency issues" in two sites that were impacting revenue and profitability.
Proton Motor Power Systems PLC (AIM:PPS) was another major faller following its interim trading update.
Trading “proved to be extremely challenging with potential customers being hesitant to make substantial investments in hydrogen fuel cells”, conceded chairman Antonio Bossi.
Order intake fell to £500,000 from £1.4 million in first-half 2023 and shares dipped 39% in response.
Among the biggest fallers in the natural mining and energy segments were gold miner Wishbone, which dipped 42%, oil and gas group Mosman, which fell 20% and Chariot, another oil and gas company that was off nearly 50%.
Global Petroleum Ltd (AIM:GBP) flew to the top of the AIM movers list with a 58% gain following a flurry of operational updates.
The company announced that it had applied for two further exploration licences in Western Australia after identifying potential exploration targets within the licences.
Global Petroleum also exercised its option to acquire an additional 10% stake in one of its Western Australian licences.
Nostra Terra Oil and Gas Company had a bumper week, adding 20% to its share price.
Investors were buoyed by the appointment of Paul Welch as its new chief executive, replacing founder Matt Lofgran.
Nostra Terra said Welch has brought to the company a relevant skill set, experience and a clear plan for organic growth.
Cloud-based digital editing platform provider Blackbird PLC (AIM:BIRD) flew another 16% higher following last week’s interim report, when it announced a jump in users and reduction in pre-tax losses.
Independent games developer Team17 Group PLC (AIM:TM17) added 23% after announcing an 11% year-on-year revenue increase in the first half. Team 17 is known for developing simulation games, including Construction Simulator, Police Simulator and the grim-sounding Autopsy Simulator.
Synectics (AIM:SNX) plc added 14% after reporting continued positive trading momentum in the third quarter.
The company, which specialises in advanced security and surveillance systems, told investors that full-year financial results for 2024 are expected to exceed previous market forecasts.