S4 Capital To Expand Services Into Tech as it Reveals Second Quarter Growth

S4 Capital, which is the holding company for the recently rebranded umbrella agency group of Media.Monks, intends to expand its services into technology—it has revealed—as it announced a six-month increase in gross profit of 49% while experiencing an acceleration in growth for the second quarter. With like-for-like billings up by almost 82% to $756.5 million (547.5 million pounds), the group reported growth of 66% in gross profit during the second quarter. As a result, the company has also increased its guidance for a third time this year due to the growth in demand for digital marketing support, from 35% to 40% gross profit for the year. Reported revenue grew by 98% to $386 million (279.3 million pounds), while reported gross profit was up by 91% to $327 million (236.7 million pounds) for the same period. Headcount more than doubled to 5,751 year-on-year following a number of mergers—including most recently with Taco Bell’s culture agency Cashmere, as well as Jam3, Racoon and Firewood. Due to the mergers, the business announced a like-for-like pre-tax loss of $27.8 million (20.1 million pounds). The company revealed that the content side of the business had driven $217 million (157 million pounds) in gross profit, while digital media made $99 million (71 million pounds) during the first six months to June 30. The Americas generated $233 million (168.8 million pounds) in gross profit, while EMEA made $66 million (48.3 million pounds) and APAC drove $27 million (19.6 million pounds). Describing the first six months of 2021 as “super strong,” executive chairman Sir Martin Sorrell, highlighted in a statement the acceleration of digital transformation by Covid-19 as a disruptor for consumers, media and enterprise. Sorrell discussed the rate of digital growth with Adweek during the NextTech festival earlier this year, stating that the demand was not slowing down. 'You Ain't Seen Nothing Yet': S4 Capital's Sir Martin Sorrell on Digital Growth "These results confirm that S4Capital is converting at scale with five "whopper" clients,” he continued, with 10 more identified from a target this year of 20. Each "whopper" is a client that generates more than $20 million in gross revenue a year, however, the company has not yet revealed who those clients are. “We are clearly in a disruptive, growth sweet spot and our digital-only, faster, better, cheaper, unitary, ‘holy trinity’ model, which combines first-party data with digital content, data and digital media is gaining traction, particularly in a cookieless world,” he added. Sorrell also highlighted that the company was only celebrating its third year as a listed company, with an ambition to continue to add “data, content, digital media and, potentially in the future, technology services capabilities,” to its offering. The move to expand its technology services will come from further merger deals, as has been the strategy for growth within S4 Capital. Other merger combinations for the company during 2021 have including technology and media agency Decoded Advertising, Tomorrow, based in Shanghai, Staud Studios in Stuttgart, Metric Theory—the performance marketing agency—as well as Datalicious in Australia. “The second half of 2021 and the prospects for 2022 look very good primarily driven by the fiscal and monetary stimulus, as well as the years beyond driven by digital transformation,” Sorrell concluded.