S4 Capital increases its sales and earning outlook for 2021
The digital advertising agency run by Sir Martin Sorrell has upped its sales and earnings outlook for 2021 amid a bounce back in the global economy and the ongoing switch towards online content.
S4 Capital said it is now expecting 30% like-for-like revenue and gross profit growth this year, up from 25% previously.
It comes as the group posted a 35% surge in like-for-like revenues to £122 million for the first three months of 2021, with comparable gross profits up 33% to £104 million.
S4 Capital said it believes digital advertising will grow 20% a year due to the shift online driven by the pandemic and expectations for a marked bounce back in global gross domestic product (GDP) in 2021 and 2022.
Sir Martin, former boss of global ad giant WPP and now the executive chairman of S4 Capital, said: “We are extremely optimistic about our prospects for this year and next, given the huge global fiscal and monetary stimulus introduced to counter the impact of the pandemic and the subsequent increase in consumer savings ratios and stagnation of corporate capital investment.
“The chickens may well come home to roost in 2023, given the debt burden that most countries will have and the tax increases that will have to be implemented.
“But, digital marketing expenditure remains robust, even in a recession, as our results last year demonstrate, given its secular growth trend.”