S4 Capital shares jumped on Monday after reporting fourth-quarter trading ahead of its revised guidance, with the advertising group expecting to exceed the current market consensus for both net revenue and operational EBITDA for the full year.
The company anticipates full-year net revenue of approximately £664 million, representing a like-for-like decline of around 8.5%.
However, the operational EBITDA margin is expected to reach circa 12%, delivering operational EBITDA of roughly £75 million, surpassing the consensus forecast. Investors cheered the update, with shares jumping by more than 20% amid a challenging backdrop for advertising groups.
The introduction of AI is shaking up the industry, and shareholders will be pleased to see S4 successfully navigating the new environment.
The group said it has achieved a substantial improvement in its financial position and Net debt is projected to come in significantly below the current consensus of £133 million and beneath the previously indicated range of £100-140 million.
Consequently, the net debt to operational EBITDA ratio at year-end 2025 is expected to be approximately 1.1x, well below both the current consensus of 1.8x and the company’s target of 1.5x.
“Good to see both delivery beyond revised net revenue and operational EBITDA guidance and the significant improvement in liquidity,” said Sir Martin Sorrell, Executive Chairman of S4 Capital.
“However, there is still much more to be done around net revenue and margin growth in 2026 and beyond which we will cover with the 2025 results presentation in March. The recommended 1p final dividend is an indication of the Board’s confidence in continued improvement. In an increasingly volatile world, clients continue to carefully assess where they should expand geographically and how they can apply new technologies such as AI, Blockchain and Quantum to increasing efficiency.”