(Reuters) - Martin Sorrell's ad group S4 Capital on Monday cut its annual revenue forecast for the second time this year after flagging continued caution among clients limiting marketing spend amid
S4 Capital Shares Plummet to Record Low Following Revenue Forecast Cut
S4 Capital's Revenue Forecast and Market Reaction
By DhanushVignesh Babu
Impact of Global Economic Conditions
(Reuters) - Martin Sorrell's advertising group S4 Capital cut its annual revenue forecast on Monday for the second time this year, hit by companies reducing their marketing budgets amid global economic uncertainty and U.S.-imposed tariffs.
Client Caution and Future Expectations
Shares in the owner of ad agencies such as Monks and MightyHive fell as much as 14% on the news to an all-time low of 19.48 pence. The shares have lost about 30% of their value so far this year.
Financial Performance Overview
S4 Capital, which generates nearly half of its revenue from the technology sector and counts counts General Motors, Amazon, and T-Mobile among its clients, has been facing sustained pressure as clients continue to reduce their marketing spending in favour of AI investments.
S4 expects annual like-for-like net revenue to fall by mid-single digits this year, from a downgraded forecast in June of a low-single-digit decline.
However, the company maintained its annual like-for-like operational core profit guidance and said it expects an improved performance in the second half of the year, helped by the timing of revenue from new business wins and further cost reductions.
Sorrell, who founded S4 after leaving rival WPP in 2018, said clients remain "generally cautious".
"Market conditions in the first half of 2025 reflect the continuing impact of, to say the least, volatile global macroeconomic conditions along with the unsettling effect of tariff negotiations," he added.
The company reported a 10% year-on-year drop in like-for-like net revenue to 328.2 million pounds ($445.07 million) for the six months ended June 30 and posted a 22.3 million pound loss for the period, widening from a 13.7 million pound loss a year earlier.
"As we move into second-half, comparables should become easier and net revenues will likely benefit from recent business wins. However, the lowered top-line guidance clearly indicates that trading conditions remain challenging," Peel Hunt analysts said in a note.
($1 = 0.7374 pounds)
(Reporting by DhanushVignesh Babu in Bengaluru; Editing by Rashmi Aich and Susan Fenton)
