Martin Sorrell’s S4 Capital warns of tariff uncertainty
Sir Martin Sorrell has warned S4 Capital will feel the weight of global macroeconomic volatility into 2025 as losses at the London-listed marketing group widened significantly.
In a statement, Sorrell cited continued high interest rates and underperformance and warned of “uncertainty in global economic policy, particularly tariffs” into 2025.
He added that geopolitical volatility stemming from US/China relations and Russia’s War in Ukraine would likely cause clients to “to remain cautious” into 2025.
Losses for the year widened to £306.9m from £14.3m the year prior, while revenue fell 13.6 per cent to £848.2m.
S4 said technology clients had continued to focus spending on AI-related ventures rather than operating expenditures such as marketing.
However, shares jumped following the announcement as the group announced a first-ever dividend of 1p per share.
It outlined a goal of reaching “broadly similar” net revenue and operational pre-tax earnings before interest, taxes, depreciation, and amortisation (EBITDA) next year. For the year ended 31 December, operational EBITDA fell 6.3 per cent to £87.8m.
Shares in S4 Capital have fallen 27.1 per cent over the last 12 months after a succession of profit warnings.
Sorrell said: “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.
“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.
He added: “Despite this, the Company reduced its cost base significantly, increased its operating margins and reduced its net debt markedly. “
S4 Capital’s chief financial officer Mary Basterfield stepped down from her position in January after three years in the job.
The company said on Monday it was in “advanced negotiations” with a number of candidates, and anticipated announcing a successor for Basterfield in the next few weeks.