S4 Capital surges on record first-half earnings, maiden dividend

(Sharecast News) - S4 Capital shares surged on Wednesday after the advertising and media group reported record first-half operational earnings and declared its inaugural dividend, despite lowering its full-year revenue guidance.

Operational EBITDA jumped 82.7% to a record �38m in the six months ended 30 June, and was 127.5% higher on a like-for-like basis. The corresponding margin expanded by 600 basis points to 12.3%, reflecting cost reductions, fewer non-billable roles and back-office efficiencies.

The board approved an inaugural interim dividend of 1.35p per share, equivalent to 50% of adjusted basic earnings per share, which increased to 2.7p from 0.2p.

However, S4 Capital said it now expected full-year like-for-like net revenue to decline by a mid-single-digit percentage, compared with earlier guidance of a low-single-digit decline, as clients remained cautious amid geopolitical and macroeconomic uncertainty. Technology customers were also prioritising investment in AI infrastructure over marketing expenditure, it said.

The group maintained its full-year operational EBITDA target at the current analyst consensus level of �85m and forecast a 140-basis-point improvement in its operational EBITDA margin.

First-half net revenue fell 6.2% to �308m, while statutory revenue declined 4.6% to �344m. The company reported an operating profit of �5m, compared with a �10.9m loss a year earlier.

Executive chairman Sir Martin Sorrell said: "The record operational EBITDA in the first half was primarily due to the impact of cost actions taken in the second half of 2025 and continued disciplined cost management."

Net debt fell to �66.3m from �145.9m, prompting the group to lower its year-end target range to between �50m and �80m.

Shares were 18.9% higher at 46.59p by 1331 BST.