Shares in S4 Capital surge on better than forecast trading, lower debt
S4 Capital PLC on Monday said 2025 trading was ahead of revised guidance issued in November, and above the current consensus, although it stressed there is ‘still much more to be done.’
Shares in the London-based advertising agency run by Martin Sorrell shot up 38% to 26.72 pence each in London on Monday morning. They have fallen 20% in the last 12 months, however, and sit well below the lofty heights of above 800p seen in 2021.
S4 Capital expects net revenue and operational earnings before interest, tax, depreciation and amortisation to be ahead of consensus of £664 million and £75 million respectively.
This would be down from £754.6 million and £87.8 million in 2024.
S4 expects like-for-like net revenue to be down around 8.5%, with an operational Ebitda margin of about 12%.
Net debt will be both ‘significantly’ below current consensus of £133 million and below the previously indicated range of £100 million to £140 million, S4 said, following a ‘change in Treasury management and a consequent strong focus on working capital management resulting in an improvement in liquidity.’
Net debt to operational Ebitda at the end of 2025 is expected to be 1.1 times versus current consensus of 1.8x and well below the target of 1.5x. At the end of 2024, net debt to operational Ebitda stood at 1.6x.
Executive Chair Martin Sorrell said it was ‘good to see’ revised net revenue and operational Ebitda guidance and the significant improvement in liquidity.
‘However, there is still much more to be done around net revenue and margin growth in 2026 and beyond which we will cover with the 2025 results presentation in March,’ he added.
‘In an increasingly volatile world, clients continue to carefully assess where they should expand geographically and how they can apply new technologies such as AI, Blockchain and Quantum to increasing efficiency,’ Sorrell continued.
S4 Capital said it will recommend a 1 pence dividend, subject to the finalisation of the annual results, which will be announced on March 25, alongside more detailed targets for 2026.
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