REG - S4 Capital PLC - Merger announcement & trading update

S4 CapitalAnnouncement

12/01/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220112:nRSL1920Ya&default-theme=true

RNS Number : 1920Y  S4 Capital PLC  12 January 2022

12 January 2022

 

S4 Capital plc

 

("S(4)Capital", "the Company" or "the Group")

 

Merger announcement & trading update

 

·      Combination between Media.Monks and 4 Mile Analytics, expanding
the capabilities of Media.Monks' Data&digital media practice

·      Trading continues in line with market expectations, delivering
very strong like-for-like revenue and gross profit/net revenue growth well
ahead of the previous guidance

S(4)Capital plc (SFOR.L), the tech-led, new age/new era digital advertising
and marketing services company, announces a combination between 4 Mile
Analytics and Media.Monks, which significantly expands the capabilities of its
Data&digital media practice. The merger augments its global analytics
capabilities and expands its client base. 4 Mile Analytics is a leader in data
analytics, data engineering, data governance, software engineering, UX design
and project & product management.

 

4 Mile Analytics was founded in 2017 by Nick Fogler in Santa Cruz, California
as a focused data consultancy, with the goal of helping clients extract more
value from their data. The company works with Fortune 500 brands to enable
custom data experiences leveraging technology from partners such as Looker,
Snowflake, Fivetran and Google Cloud. With around 50 data specialists, 4 Mile
Analytics generated revenues of approximately $6.5m in 2021and is targeting to
double up this year.

 

Sir Martin Sorrell, S(4)Capital Executive Chairman said, "Understanding and
acting on data is at the heart of the S(4)Capital Content, Digital Media and
Technology services offering. Therefore, we are delighted to welcome Nick, Sam
and their colleagues at 4 Mile Analytics, as we expand our capabilities and
partnerships, in particular with Google and their Looker and Google Cloud
platforms."

 

Nick Fogler, 4 Mile Analytics CEO and Founder, said "We couldn't be more
excited to join forces with Media.Monks and S(4)Capital. We see huge
opportunities to bring the offerings of the wider group to our clients and
provide even more opportunities for our team."

 

Tyler Pietz, Global Executive Vice President, Data, Media.Monks, said "We've
seen incredibly strong demand for data analytics and engineering expertise
from our clients. Nick and his team at 4 Mile Analytics will bring additional
expertise, scale and clients to one of our fastest expanding service areas."

 

Trading update

 

S(4)Capital confirms that trading for the first 11 months and forecasts for
December continue in line with market expectations, delivering very strong
like-for-like revenue and gross profit/net revenue growth well ahead of the
previous latest company guidance of 40% (at almost double the growth in our
addressable markets, which are forecast to grow 20-30% in 2021)*.

 

Operational EBITDA margins improved significantly in the second half, as
flagged in the half year report in September and the third quarter statement
in November. Even after allowing for the cash consideration paid in respect of
mergers recently completed, including 4 Mile Analytics, the Company has
monthly net debt ranging between £10 and £30 million, reflecting strong
operational cash flow.

 

Commenting on 2022 prospects Sir Martin Sorrell, S(4)Capital Executive
Chairman said, "We are excited about the growth opportunity ahead of us in
2022 and beyond, all incorporated into our fourth three year plan for 2022-24.
Our budgets are set at 25% like-for-like gross profit/net revenue growth in
line with that three year plan, which seeks to double the size of the company
organically and targets an improvement in the operational EBITDA margin back
towards previous levels".

 

Full year results for 2021 will be announced on 18th March 2022.

 

*Addressable Markets: Moffat Nathanson forecast 28.8% digital media spend
growth in 2021, Groupm at 29.2%, ZenithOptimedia at 25%. Morgan Stanley
forecast Tech Services growth at 21% in 2021. The 9 investment analysts that
follow S(4)Capital forecast consensus Gross Profit of £560m for 2021.

 

Enquiries

 

 S(4)Capital plc                                  Tel: +44 (0)20 3793 0003
 Sir Martin Sorrell, Executive Chairman

 Powerscourt (PR adviser to S(4)Capital plc)      Tel: +44 (0)7970 246 725
 Elly Williamson
 Jane Glover

 

 

About 4 Mile Analytics

 

4 Mile Analytics is a full-service data consultancy specializing in custom
data experiences powered by the Looker platform.

 

 We believe in the power of compelling data narratives to drive better
decision-making. 4 Mile's tailored solutions help our clients move up the
ladder of analytic maturity.

 

Our approach to technology is human-centric: we focus on people and
relationships first, valuing diversity, empathy, and respect.

 

About S(4)Capital

 

S(4)Capital (SFOR.L) is the tech-led, new age/new era digital advertising and
marketing

services company, established by Sir Martin Sorrell in May 2018.

 

Its strategy is to build a purely digital advertising and marketing services
business for global, multinational, regional, local clients and
millennial-driven influencer brands. This will be achieved by integrating
leading businesses in three practice areas: content, data&digital media
and technology services, along with an emphasis on "faster, better, cheaper"
executions in an always-on consumer-led environment, with a unitary structure.

 

Digital is by far the fastest-growing segment of the advertising market.
S(4)Capital estimates that in 2021 digital accounted for approximately 60% or
$420-450 billion of total global advertising spend of $700-750 billion
(excluding over $500 billion of trade promotion marketing, the primary target
of the Amazon advertising platform) and projects that by 2022 total global
advertising spend will expand to $770-850 billion and digital's share will
grow to approximately 65% and by 2024 to approximately 70%, accelerated by the
impact of covid-19.

 

In 2018, S(4)Capital combined with MediaMonks, the leading AdAge A-listed
creative digital

content production company led by Victor Knaap and Wesley ter Haar, and then
with

MightyHive, the market-leading digital media solutions provider for future
thinking marketers and agencies, led by Peter Kim and Christopher S. Martin.
Since then, MediaMonks and MightyHive have combined with more than 25
companies across content, data&digital media and technology services. For
a full list, please see the S(4)Capital website (https://www.s4capital.com/)
. In August 2021, S(4)Capital launched its unitary brand by merging MediaMonks
and MightyHive into Media.Monks, represented by a dynamic logo mark that
features MightyHive's iconic hexagon. As the operational brand, Media.Monks
underpins S(4)Capital's agility, digital knowledge and efficiency and is the
next step in delivering on its foundational promise to unify content,
data&digital media and technology services.

 

Victor Knaap, Wesley ter Haar, Pete Kim, Christopher Martin, Mary Basterfield
and Scott Spirit all joined the S(4)Capital Board as Directors. The
S(4)Capital Board also includes Rupert Faure Walker, Paul Roy, Daniel Pinto,
Sue Prevezer, Elizabeth Buchanan, Naoko Okumoto, Margaret Ma Connolly, Peter
Rademaker and Miles Young.

 

The Company now has well over 7,500 people in 33 countries across the
Americas, Europe, the Middle East and Africa and Asia-Pacific and a current
market capitalisation of approximately £3.0billion (c.$4.0billion) and would
rank inside the FTSE 150. It achieved Unicorn status in a little over one
year, unique in the advertising and marketing services industry. Sir Martin
was CEO of WPP for 33 years, building it from a £1 million "shell" company in
1985 into the world's largest advertising and marketing services company with
a market capitalisation of over £16billion on the day he left. Today its
market capitalisation is £13.5 billion. Prior to that Sir Martin was Group
Financial Director of Saatchi & Saatchi Company Plc for nine years.

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCBTMFTMTABMBT