
S4 Capital reported a double-digit revenue decline for the third quarter
and first nine months of the year and indicated that the full-year outlook was for a low double-digit shortfall as well.
Company shares were down more than 8% on the news in afternoon trading on the
London stock exchange.
Net revenue for Q3 was down 15.2% to 179.3 GBP with an organic revenue decline of 12.6%, which S4 attributed to lower activity in its content
division and with less spending from a major technology services client. Organic revenue excludes M&A and currency impact.
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Net revenue for the first nine months was 555.4 GBP, down 15.5% with an
organic revenue drop of 13.2%.
"Trading in the third quarter reflected the continued impact of trends we saw in the first half, namely challenging global macroeconomic
conditions and high interest rates, as well as some underperformance when compared to our addressable markets,” stated company chairman Martin Sorrell.
“These trends have
impacted marketing spend by some technology clients and our Technology Services practice continued to be affected by a reduction in one of our larger client relationships, as previously flagged. Data
& Digital Media's like-for-like run rate improved, while Content saw a slight improvement in the third quarter, but did not benefit as much as expected from easier prior year
comparisons.”
“In light of the continued net revenue softness, we have maintained the heightened focus on cost reduction and we now expect like-for-like
operational EBITDA (earnings before interest, taxes, depreciation and amortization) to be slightly below the prior year.”
S4’s largest region, The Americas, posted a 14.5%
organic revenue decline in Q3 with a 14.7% shortfall for the first nine months.