S4 Capital PLC on Monday said it expects full-year earnings to fall below the current market consensus, as it said its lowered revenue outlook will hurt profit.
Shares in S4 Capital fell 6.8% to 16.49 pence on Monday morning in London. Its stock has fallen 55% over the past year.
The London-based advertising firm said it expects like-for-like revenue for the financial year ending December 31 to fall by just under 10%.
The lower revenue is expected to hurt S4 Capital’s operational earnings before interest, taxes, depreciation, and amortisation, despite the company’s cost-cutting measures.
The company said it is targeting operational Ebitda to be approximately £75 million, which is below the current market consensus of £81.6 million.
At the beginning of the month, S4 Capital forecasted operational Ebitda to remain broadly similar to last year’s result of £87.8 million. However, Monday’s profit warning now represents a 15% decrease on financial 2024’s Ebitda.
‘This is mainly as a result of lower project-based revenue, continued client caution and a slower ramp up of our new business wins than expected,’ said S4 Capital.
The company said its liquidity continued ‘to improve more than anticipated’ and that its targeted range for the year end net debt remains between £100 million to £140 million.
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