Martin Sorrell's advertising group S4 Capital cut its annual revenue forecast today for the second time this year, hit by companies reducing their marketing budgets amid global economic uncertainty and US-imposed tariffs.
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.
S4 Capital, which generates nearly half of its revenue from the technology sector and 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 £328.2m for the six months ended June 30 and posted a £22.3m loss for the period, widening from a £13.7m 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.
