Martin Sorrell-led S4 Capital reported today that net revenue in the second quarter was below internal budget expectations “with May and June in particular.”   

As a result, the firm sharply cut its organic revenue growth guidance for the full year to between 2% and 4% from the previously stated 6% to 10%.  

S4 shares on the London Exchange fell 21% on Monday on the news.   

S4 Capital is the latest ad-marketing holding firm to report Q2 growth coming in below expectations, following last week’s updates from Omnicom and Interpublic.   

And the firm cited similar reasons including challenging macroeconomic conditions and “clients, especially those in the technology sector, remaining cautious and very focused on the short term.”  

The company said that larger transformation projects appear to remain on track.    

“Some impact has been seen in each of the practices, but it is particularly evident in Content,” which is led by the firm’s Media.Monks unit.   

The firm said that its organic net revenue growth for the first half is estimated at 5%.     

The slower topline growth will also affect the firm’s full-year pre-tax profit margin, now expected to be in the 14.5-15.5% range, as opposed to the previously stated 15-16% range.   

“As in prior years, 2023 will again be significantly second half weighted reflecting our seasonality,” the company said.   

“Based on our preliminary review of the H1 results, Technology services continues to perform well, Data&digital has seen growth slow compared to 2022, but is trading satisfactorily, while Content has had a more difficult period generating results below our budget.”  

Full first-half results are currently scheduled to be released September 18.