Martin Sorrell’s pure-play digital advertising group S4 Capital posted a 11% fall to £848.2 million in revenue on a like-for-like basis for the year to December.
Sir Martin said clients are likely to remain cautious and the economic environment challenging, especially with tariffs.
Technology clients continue to focus spending on AI-related capital expenditure, rather than operating expenditure, such as marketing.
In the meantime, S4 is cutting costs and reducing debt. Net debt was £142.9 million, down from £180.8 million the year before.
Staff numbers are down 7% to 7,150. Personnel and operating expenses fell 13.5% to £660 million.
Billings for the year came in at £1,963 million, up 4.9% on a reported basis and up 8.1% like-for-like.
The company plans its first dividend of 1 pence per share, amounting to £6.1 million.
“Our performance in 2024 reflected the impact of challenging global macroeconomic conditions, continued high interest rates and some underperformance, when compared to our addressable markets,” Sir Martin said.
“Technology clients prioritised capital expenditure over operating expenditure, such as marketing and our Technology Services Practice was affected by a reduction in one of our larger relationships.
“Despite this, the company reduced its cost base significantly, increased its operating margins and reduced its net debt markedly.
“Our liquidity and cash flow was much improved and net debt was below the lower end of our target range due to our focus on working capital and cost control.
“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 to be broadly similar to 2024, with a further reduction in net debt.
“We continue to focus on our larger, scaled relationships with leading enterprise clients and our drive for margin improvement through greater efficiency, utilisation, billability and pricing. “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.
“We continue to capitalise on our prominent AI positioning and to see multiple initial AI-related assignments and significant testing.”
Numbers for the year to December 2024:
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