Martin Sorrell’s S4 Capital has acquired a data consulting firm in California as the advertising guru group’s revenue continues to grow.
- 4 Mile Analytics provides data and engineering services to Fortune 500 customers
- The deal will “significantly expand” Media Monks’ data and digital media capabilities
- The share price fell by 40% at the peak of September 2021
S4 Capital, an advertising agency run by former WPP owner Sir Martin Sorrell, has merged after its 2021 deal between Media Monks subsidiary and California-based 4 Mile Analytics data consulting firm.
S4 announced the deal along with a sales update, which showed that the figures for the first 11 months of the fiscal year were strong and the firm was well ahead of its previous targets of 40 percent gross profit growth.
The firm told investors on Wednesday that the deal would “significantly expand” Media Monks ’data and digital media capabilities and expand its customer base.
Sir Martin Sorrell applauded the opportunity for growth [S4] In 2022 and beyond
Based in Santa Cruz, 4 Mile Analytics provides data analysis, data engineering, data management, software engineering, UX design and project and product management for a number of Fortune 500 brands.
With nearly 50 data experts, 4 Mile Analytics generated about $ 6.5 million in revenue in 2021 and aims to double that this year.
This came after Media Monks merged with Italy’s content-marketing agency Miyagi in November, adding 70 employees to its S4 list and signing its 11th deal in a matter of months.
Nick Fogler, Founder and CEO, welcomed the prospect of “great opportunities to deliver a wider group of offers to our customers and provide more opportunities for our team”.
Tyler Pitts, Media Monks’ global executive vice president of data, added: “We have seen an extremely strong demand for data analysis and engineering expertise from our customers. Nick and his team at 4 Mile Analytics will bring additional experience, scale and customers to one of our fastest growing service industries. ‘
S4 Capital also found that operating earnings margins improved “significantly” in the second half of the fiscal year.
The company’s revenue more than doubled in the third quarter of 2021 after acquiring “homeless” customers.
The S4 specialized digital marketing has accelerated during the pandemic as more companies are advertising online rather than in print and on television.
Revenue rose 106 per cent during the period to £ 178 million, which was better than previously expected, while gross profit rose 92 per cent to £ 144.4 million.
Recent customer additions include social media giant Facebook and computer maker HP. Existing customers include Google, Amazon, Burberry and Netflix.
S4 shares remain about 40% lower than their September high
Sir Martin Sorrell welcomed the “growth opportunity ahead of us in 2022 and beyond” and added that the S4 budget was set at “25 per cent gross profit / net income growth under the three-year plan”. aimed at doubling the company’s size and returning operating EBITDA margins to previous levels.
S4 shares rose 5.7 percent to 560p on Wednesday afternoon, but fell slightly to 555p this morning.
Shares have fallen about 40 percent since their peak in September, driven by concerns about a decline in margins.
Peel Hunt analysts note that the stock’s rating has “overstated, the shares are now being sold at only 28x FY22E PE”.
“We believe the approval of ongoing work will support stock prices.”
Analysts gave the S4 a Buy rating with a target price of 950p.