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S4 Capital ‘growing in line’ with tech giants as it upgrades forecasts for third time

Campaign 13 Sep 2021 02:58

Sir Martin Sorrell’s three-year-old agency group S4 Capital has claimed it is growing at the pace of the tech giants, not the legacy agency sector, after reporting a 66% increase in net revenues in Q2.

Over the half-year period to June, net revenues were up 49% and the momentum continued into July, which was up 50%.

Sorrell upgraded S4 Capital’s revenue forecast for the full year for the third time and now expects 40% growth for the whole of 2021.

S4 Capital conceded there are relatively easy comparisons with 2020 because that was the financial low point of the pandemic but pointed out: “On a like-for-like basis the company’s two-year stack for the first half of 2021 was up 75% (ie comparing 2021 with 2019 on a constant currency basis).”

That increase shows “S4 Capital is more of a proxy on the growth of the digital platforms, with Google’s Q2 two-year revenue growth stack at 57% and Facebook’s Advertising revenue Q2 two-year growth stack at 66%, rather than the adholdcos, which were generally flat”.

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