Sorrell eyes "five more whopper" wins as S4 makes new merger, posts 19.4% gross profit hike
S4 Capital aims to land five more "whopper" brands this year after winning Mondelez and BMW/Mini in 2020 according to Sir Martin Sorrell. The firm made solid gains during a pandemic year, and Sorrell predicts a bumper 2021.
What you need to know:
- S4 aiming to land five more big brands to portfolio by year end.
- Executive Chairman Sir Martin Sorrell predicts strong 2021 and 2022 as stimulus funds rebound.
- MediaMonks merger announced for Canadian design and experience agency, Jam3.
S4 Capital aims to "identify and develop" five more "whoppers" this year after winning Mondelez and BMW/Mini, according to Executive Chairman Sir Martin Sorrell.
The firm posted a 19.4% like for like gross profit hike for 2020 and pared back statutory losses to £3.9 million (A$7m) after tax.
Emerging apparently unscathed from the pandemic, during which staff had delivered "unflinchingly", the former WPP CEO and founder said 2021 has also started strongly.
The group, which now employs more some 4,400 people worldwide, also announced another merger. It intends to roll Canadian design and experience agency Jam3 into MediaMonks. The firm, with around 100 staff, also has offices in Amsterdam, Montivideo and LA.
"2021 has started strongly, well in line with our latest three year plan to double organically in three years," said Sorrell. "We are focused on three objectives for the year – to bed down our two new 'whoppers' and develop and identify five more; to roll-out our unitary branding; and to continue to broaden and deepen our digital client offering by combination.
"We believe 2021 and 2022 will be very strong years economically, as the world rebounds from the pandemic and spends and invests the huge pandemic-driven fiscal and monetary stimulus. Digital marketing expenditure is closely correlated, but not dependent on GDP growth, just as traditional media spending used to be in the last century.”
However, Sorrell has suggested a bumper harvest may be followed by a famine.
“I’m worried about what happens in 2023 and beyond because I think GDP growth looks as though it will go back to where it was pre-Covid,” he told the AFR earlier this month.
Key 2020 financials:
- Like for like billings up 19.6% to £653.4m (A$1.18bn).
- Like for like gross profit up 19.4% to £295.2m (A$531m).
- Like for like operational EBITDA up 18.3% to £62.2m (A$112m).
- Profit before income tax £3.1 million (A$5.6m).
- Statutory loss of £3.9 million after tax (A$7m, last year £10m, A$18m statutory loss).
- £51.6 million year end cash (A$93m).
Full results here.
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