September 11, 2019 / 8:33 AM / 7 days ago

Account wins put Sorrell's S4 Capital on course to double in size

FILE PHOTO: Sir Martin Sorrell attends a conference at the Cannes Lions International Festival of Creativity, in Cannes, France, June 22, 2018. REUTERS/Eric Gaillard/File Photo

LONDON (Reuters) - Martin Sorrell said his new digital advertising company S4 Capital (SFOR.L) was increasingly being asked to bid for major corporate accounts, keeping it on track to double the size of the company by 2021.

Sorrell launched S4 Capital last year after he left the world’s biggest advertising company WPP (WPP.L), which he had founded. He said on Wednesday he was focusing on growing revenue and gross profit at the expense of slightly lower earnings, to build momentum.

The group has already won work from the likes of Procter & Gamble, Nestle, Coca-Cola and Sprint and said it was being asked to bid for other major clients.

“We’ve got three major global pitches at the moment,” Sorrell said in an interview. “We’re very pleased, we want to double the size of the business in three years, organically, and we’re well on the way to doing that.”

Sorrell, who left WPP over a complaint of personal misconduct, which he denied, has bought businesses which create content, and others which buy online advertising space automatically, enabling S4 Capital to offer an integrated service.

He is aggressively building up the firm to be able to compete with the major advertising groups, taking headcount to 1,375 people by the end of the first half and adding senior management. It is also looking to make more acquisitions to build up its content, programmatic buying, and data and analytics capabilities.

“We’ve got a couple of things that we will finance internally, one in the UK and one in Asia which we’ll add fairly quickly,” he said.

For the first six months of the year the group reported billings of 184 million pounds ($228 million), up 44% on a pro-forma basis. Gross profit also accelerated through the year, rising by 34% in the first quarter, up 46% in the second quarter and up 54% in July from a year earlier.

Reporting by Kate Holton; Editing by Susan Fenton

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