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S4 Capital PLC saw its share price climb more than 20% on Tuesday, despite its earnings being forecast to fall after ‘challenging’ trading in 2024. Shares in the London-based advertising firm were up 24% at 41.42 pence each in London on Tuesday afternoon. S4 Capital said it expects net revenue for 2024 to be ‘slightly above’ the current market consensus at £746 million, which would represent a 16% decline from £873.2 million last year. The firm anticipates full-year earnings before interest, tax, depreciation and amortisation of £84 million, falling 11% on-year from £93.7 million. S4 Capital also expects a non-cash impairment charge to be included in its exceptional items, though it did not on Tuesday outline how much it expects the charge to be. Chair Martin Sorrell said: ‘Trading in the fourth quarter improved over the first three, with stronger like-for-like net revenues performance and operational Ebitda margins. However, our industry continued to reflect the trends seen earlier in the year. Tech clients, accounting for approximately half of our revenue, continued to invest significantly in capital expenditure to build [artificial intelligence] capacity rather than marketing operating expenditure. ‘Global macro-economic conditions remained challenging and interest rates relatively high and there was some underperformance, when compared to our markets. In addition our Technology Services practice continued to be affected by a reduction in one of our larger relationships. ‘Despite this challenging environment, the Company successfully improved its cost base and protected operating margins. Liquidity and net debt was significantly better due to improved profitability in the fourth quarter and tight working capital control, coming in below the lower end of our net debt range. ‘Although it is early in the year, there is still some macro-economic uncertainty, interest rates remain high and clients are likely to remain cautious. That said, the headwind we experienced in Technology Services is likely to ease and initial indications are for net revenue and operational Ebitda to be broadly similar in 2025 to 2024. We will maintain our focus on cost efficiency for the year ahead.’ S4 Capital will release its 2024 results on March 24. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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