Pure-play digital advertising group S4 Capital reported more falls in revenue, due in part to cautious technology clients, but said it was still on track to deliver on target full year profit.
Revenue fell 16.2% like-for-like to £422.5 million in the six months to June. Net revenue was down -13.5% to £376.1 million.
The half year loss narrowed to -£13.7 million compared to -£21.8 million in the same six months in 2023.
Operating expenses have been cut 14.4% to £342.7 million and staff numbers at S4's Monks unit have been reduced 12% to 7,550.
However, full year like-for-like net revenue is expected to be down on the prior year to a greater extent than that assumed in the company’s May trading update.
“As highlighted previously, trading in the first half reflects the continuing impact of both challenging global macroeconomic conditions and high interest rates,” said executive chair Sir Martin Sorrell.
“This particularly impacted marketing spend by some technology clients and our technology services practice was affected by a reduction in one of our larger relationships. “
The company’s strategy is unchanged, to build a purely digital advertising and marketing services business for global, multinational, regional, and local clients, and millennial-driven influencer brands.
Sir Martin said there has been improvement in the company’s content practice first half margins, reflecting the actions taken on cost both last year and this year.
“We continue to develop our larger, scaled relationships with leading enterprise clients and are maintaining our focus on margin improvement through greater efficiency, utilisation, billability and pricing,” he said.
“We maintain our profit target for the full year and, as in prior years, financial performance will be significantly second half weighted.
“We remain confident in our strategy, business model and talent, which together with scaled client relationships position us well for growth in the longer term, with an emphasis on deploying free cash flow to improve shareowner returns, now all significant combination payments have been made.
“In addition to a very significant new account, we continue to capitalise on our prominent AI positioning and we continue to see multiple initial AI related assignments as clients start to use our MonksFlow tools and our experience to implement applications."
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