Pure-play digital advertising group S4 Capital has lifted organic gross profit guidance as the global economy snaps back from the pandemic.
Guidance for organic gross profit growth has gone to 35% from 30%, up from the original forecast of 25%.
The company also flagged a change for its content practice businesses MediaMonks and MightyHive to create one brand.
The big global advertising groups -- Denstu, WPP, Omnicom, IPG, Publicis -- have also reported a strong start top 2021.
S4 executive chairman Martin Sorrell told the company’s AGM: “We are confident that we will be able to deliver sector leading, high double digit like-for-like revenue and gross profit growth for 2021.”
Since the last AGM in June last year the company has doubled staff to more than 5,500 in 31 countries and almost tripled its market capitalisation to more than £3 billion ($US4.2 billion).
In the same 12 months, S4 has acquired 12 content companies and 11 digital media companies.
Sir Martin says both revenue and gross profit or net revenue like-for-like growth rates accelerated markedly in April.
“We do not have our May figures as yet, but early indications are that May will be similar to April and that in June, the pipeline continues to be robust,” he says.
Tech clients, which constitute more than half of revenues, are generally outspending FMCG, pharma and retail clients, but all verticals exhibit “robust activity”.
The company is raising a loan of $US350 million to finance further expansion.
“All these mergers have historically been branded under the MediaMonks and MightyHive banners and, in turn, MediaMonks and MightyHive have been increasingly and already successfully acting as one in going to market,” Sir Martin says.
“The combined firm will, in future, go to market under one brand or flag.”
S4 will continue with strategic mergers.
“Having achieved brand awareness and brand trial over the first three years, our focus remains on broadening and deepening existing client relationships and conversion at scale.
“Our five biggest clients will achieve ‘whopper’ status this year (i.e. over $US20 million of revenue), but we still search for bigger and deeper relationships, and a further three clients, one in technology, one in telecommunications and one in financial software may also achieve “whopper” status this year, making a total of eight out of an objective of twenty,” he says.
“A further seven have been identified as having ‘whopper’ potential. Notable recent client wins, including integrated content and programmatic assignments, number Allianz, Crocs, N26, Instacart, Shopify, Xero and Banorte amongst others.
“We are currently actively involved in a number of global and regional pitches and conversations.”
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