Martin Sorrell's S4 Capital lifted like-for-like revenue 6.1% to £261.7 million in the March quarter, with the pure-play digital advertising agency on track to hit full year forecasts.
Net revenue grew 6.8%, driven by technology services
Sir Martin described the result as a "solid" start to the year and is "cautiously optimistic" for the rest of the year.
The company is maintaining its full year target of 8%-12% net revenue growth. Net debt in 2024 is expected to decrease substantially.
S4 Capital's reported growth corresponds to the global holding companies. Omnicom posted 5.2% growth in the March quarter, WPP reported a 2.9% rise in net sales and Publicis Groupe came in with superior organic growth of 7.1%.
At S4 Capital, Sir Martin says the company is maintaining a focus on balancing growth in net revenue against costs, which is reflected in people numbers remaining almost constant.
"Technology services has led our growth in the first quarter, followed by Content and Data & digital media, reflecting the growing client focus on digital transformation," he says.
"Geographically, the Americas have led, followed by EMEA and APAC, reflecting the growing relative importance of the North and South America 'pillar' markets, the last being affected by lack of growth in China, although prospects are improving significantly in the second quarter post-Covid lockdown.
"We remain cautiously optimistic for the rest of the year, despite a slowdown of forecast growth rates in our two major addressable markets to 7%-10% and expect to make continued progress, broadening and deepening our client conversion at scale.
"Technology clients continue to maintain their marketing investment, with AI and AGI being new opportunities for exploration and we are opening up further significant land&expand relationships in packaged goods, financial services and technology."
S4 Capital March quarter 2023:
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