Martin Sorrell's S4 Capital said today its 2025 profit and revenue would be ahead of its previously lowered forecast, sending the advertising group's shares nearly 42% higher.
S4 now expects its 2025 net revenue and operational core profit to exceed analysts' estimates of £664m and £75m, respectively.
The advertising market has been grappling with reduced client spending as they prioritise investments in areas such as artificial intelligence amid economic and geopolitical uncertainty, weighed on agencies across the sector.
S4, which has cut costs and streamlined operations to offset these pressures, also said its net debt would be below consensus forecasts and its previously guided range of £100-140m after improved working capital management.
Shares in S4, which fell nearly 38% in 2025, were on track for their best day's performance since May 2018.
Although the results signalled stabilisation, S4 said clients remain cautious on budgets while turning to new technologies including AI, blockchain and quantum computing.
"There is still much more to be done around net revenue and margin growth in 2026 and beyond," Sorrell said in a statement.
S4, which relies heavily on technology-focused companies for its income, said continued market softness is still expected to drive like-for-like net revenue about 8.5% lower.
Despite signalling in November it may consider an enhanced final dividend, S4 said it will recommend a one pence per share payout today, the same as the year before.
