Daily Mail

Sorrell raises spirits at S4 despite ballooning losses

- By John-Paul Ford Rojas

Sir Martin Sorrell cheered investors in his beleaguere­d digital advertisin­g firm S4 Capital as he said prospects were ‘relatively bright’ despite war in Europe and surging inflation.

Shares rose 12.5pc, or 17.9p, to 161.4p even as it reported operating losses ballooning more than fourfold to £75.4m for the first half of the year.

The figures showed revenues continuing to grow, up 59.8pc to £446.4m, and that two ‘whopper’ clients had been signed up.

Sorrell founded S4 Capital in 2018 after three decades leading adland giant WPP. it now employs more than 9,000 people. it was forced to delay its annual results this year, in a move that was described by the tycoon as ‘unacceptab­le and embarrassi­ng’, and warned of lower profits in July as hiring costs surged.

its woes have left shares 75pc lower for the year to date.

But it has now put the brakes on its hiring spree, and signalled a shift in focus away from buying up smaller companies to maximising value from its existing business.

Client wins in the first half included Adobe, Brewdog, Tiktok, Diageo and online firm Booking.com as well as the US account of an unnamed large consumer goods business.

Sorrell sounded an optimistic note. He acknowledg­ed ‘many significan­t challenges in areas such as climate change, a lengthy war on continenta­l Europe, rising inflation and interest rates, energy shortages, fractious US/China and Western/ russia relationsh­ips and with iran’.

But he said despite this ‘ the prospects for digital advertisin­g and transforma­tion remain relatively bright, whilst traditiona­l media languish’.

‘There is evidence that demand accelerate­s during periods of economic uncertaint­y as we saw with Covid in 2020, when we performed strongly,’ Sorrell added.

He admitted the first- half profit performanc­e was ‘ disappoint­ing’ as cost growth ran ahead of sales but said S4 was acting to correct it.

The ‘whopper’ clients – those with annual revenues of more than $20m (£17.6m) – now total eight, while five more were ‘trending’ towards that status as it targets a total of 20.

 ?? ?? Ad tycoon: Sir Martin Sorrell
Ad tycoon: Sir Martin Sorrell

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