- Final dividend of 1p per share
- AI driving new business
- Shares up 13% this year
Shares in S4 Capital (SFOR) gained over 12% to 37p in morning trading as the digital media group promised its first ever dividend, although it cautioned uncertain macroeconomic conditions and client caution remained.
The company headed up by former WPP (WPP) boss Sir Martin Sorrell reported full-year 2024 results in line with expectations, with revenue down 16% to £848 million and like-for-like sales down 13.6%.
S4 Capital said it had taken a non-cash impairment charge net of tax of £280.4 million ‘reflecting trading conditions in the second half of 2024.’
FIRST EVER DIVIDEND
It was positive news for shareholders as the digital media group announced it would pay a final dividend of 1p per share, amounting to £6.1 million, on 10 July, signaling confidence in the outlook.
The company also said new business activity continued ‘at significant levels, particularly with a focus on AI-driven hyper-personalisation at scale.’
New business wins during the year included General Motors (GM:NYSE), Qiddiya, Marriott (MAR:NASDAQ), Burger King, Panasonic, FanDuel, AliExpress, Decathlon, Santander, SC Johnson, ICBC, Asana (ASAN:NYSE), CashApp, Shopify (SHOP:NYSE), Coursera and Singapore Sports Hub.
WHAT DID THE CEO SAY?
Sir Martin Sorrell commented: ‘The macroeconomic environment in 2025 will remain challenging given significant volatility and uncertainty in global economic policy, particularly tariffs.
‘In geopolitics, US/China relations, Russia/Ukraine and Iran remain volatile issues and therefore clients are likely to remain cautious.
‘With that said, we expect to benefit from new business, especially in the second half, and for the full year we expect net revenue and operational EBITDA (earnings before interest, taxation, depreciation and amortisation) to be broadly similar to 2024, with a further reduction in net debt.’
GOOD COST CONTROL
Analysts at US broker Jefferies (JEF:NYSE) said: ‘Despite macro challenges, good cost control has led to margin expansion of 0.9% in full year 2024.
‘We forecast S4 Capital to lift EBITDA margins gradually back to 14% by 2026, driven by increased operational efficiency and mix shift towards technology services.’
