By Scott Kanowsky
Investing.com -- Shares in S4 Capital PLC (LON: SFOR ) jumped on Wednesday after the U.K. media group backed its full-year profit outlook despite a slide in core earnings in the first half.
The agency, started by advertising executive Martin Sorrell after his departure from rival WPP (LON: WPP ), reiterated its guidance for annual operational income before interest, taxes, depreciation and amortization at about £120M, buoyed by expectations for "significantly stronger" results in the second half. The annual target was previously cut in July.
S4 added that it was well positioned to handle potential headwinds to global growth, particularly from soaring inflation and the conflict in Ukraine.
"[T]he prospects for digital advertising and transformation remain relatively bright, whilst traditional media languish, and there is evidence that demand accelerates during periods of economic uncertainty as we saw with Covid in 2020, when we performed strongly," S4 said in a statement.
In the six months ended on June 30, reported operational profit dipped by 12.4% year-on-year to £30.1M, due mainly to heavy spending on hiring new employees.
But the group posted a 59.8% surge in revenue during the period. S4 said it is also instituting tight cost management measures, including a brake on acquiring talent, with the number of workers recently stabilizing at around 9,100.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.