Sir Martin Sorrell’s S4 Capital continued to grow organically by double digits last year despite the Covid-19 pandemic, the company reported today alongside the announcement of another merger.
S4, which includes creative production company MediaMonks and digital media business MightyHive, posted a 19.4% growth in organic revenue to £295.2m ($404.2m) (reported as “gross profit” for 2020).
The company, having now traded for two full years, also posted an operating profit of £8.1m (compared with a £3.8m loss in 2019), while profit before income tax was £3.1m (versus a loss of £9.1m in 2019). However, on a reported basis, S4 posted a statutory loss of £3.9m due to financial adjustments after taxation.
S4 also announced another merger: it has entered into a conditional agreement to combine MediaMonks with Jam3, a design and experience agency based in Toronto, with offices in Los Angeles, Uruguay and Amsterdam, where MediaMonks is headquartered.
Last year the company joined forces with integrated US agency Decoded Advertising and Metric Theory, an integrated performance agency. Last month, MightyHive acquired the assets of Datalicious Australia, a data and analytics company.
The group now has approximately 4,400 people in 31 countries, which is less than 10% the headcount of US ad giants Omnicom and Interpublic, each of which made significant job cuts last year. S4 says its employee numbers are “trending towards double” of where it was this time last year.
Sorrell, the former longtime chief executive and architect of WPP, said his new venture started 2021 strongly, with like-for-like January gross profit well ahead of budget and with budgeted gross profit growth like-for-like for 2021 of 25%.
Last year MightyHive won T-Mobile’s in-house digital media account and MediaMonks picked up BMW/Mini’s pan-European account.
Sorrell said: "Our second full financial year was again outstandingly successful. Having established brand awareness and secured brand trial in the back end of 2018 and in 2019, we set about converting client relationships at scale and now have five 'Whoppers' secure or in sight, in line with our ultimate 20 squared objective – that is 20 clients each generating revenues of over $20m per annum."
He added: "We continued to grow our top line and bottom line at industry leading rates, despite Covid-19 and exhibited agility in developing new content revenue streams quickly, such as robotic production, animation and online events and driving data and digital marketing net revenues, particularly in the fourth quarter and into this year."