S4 Capital PLC on Monday declared its first-ever cash dividend since its listing in 2018, despite reporting a wider annual loss, saying the payout shows its confidence in its cash flow.

S4 Capital shares were up 11% to 36.43 pence early Monday in London. The stock remains down 20% over the past 12 months.

The London-based advertising agency headed by Martin Sorrell reported a pretax loss of £330.9 million for 2024, widened from £13.9 million in 2023, as revenue tumbled 16% to £848.2 million from £1.01 billion.

Billings rose by 4.9% to £1.96 billion last year from £1.87 billion in 2023, or by 8.1% on a like-for-like basis. However, net revenue fell by 14% to £754.6 million from £873.2 million, or by 11% like-for-like.

Operational earnings before interest, tax, depreciation and amortisation was £87.8 million in 2024, down 6.3% from £93.7 million in 2023, or down by 0.6% on a like-for-like basis. More positively, operational Ebitda margin was 11.6%, improved from 10.7%.

S4 Capital said operational Ebitda was in line with expectations. The pretax loss was mostly due to a non-cash impairment of £280.4 million, reflecting, it said, trading conditions in the second half of the year.

The company ended 2024 with £142.9 million in net debt, below its guidance of £150 million to £190 million and down from £180.8 million a year before.

S4 Capital declared a 1.0 pence per share final dividend, its first as a public company, which it called a ‘measure of confidence in the future’.

Looking ahead, the company said it expects net revenue and operational Ebitda in 2025 at similar levels to 2024, given a ‘challenging’ macroeconomic environment, and intends to continue focusing on costs, eyeing ‘further action to support’ profit.

In the longer-term, S4 Capital aims to return operational Ebitda margins to historic levels of 20%.

‘Our performance in 2024 reflected the impact of challenging global macroeconomic conditions, continued high interest rates and some underperformance, when compared to our addressable markets,’ Executive Chair Martin Sorrell said. ‘Technology clients prioritised capital expenditure over operating expenditure, such as marketing and our technology services.’

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