S4 Capital PLC reported on Monday that its net revenue in its second quarter was below budget, and it revised downwards its forecast for its expected like-for-like net revenue growth.

Shares in S4 Capital, the London-based advertising agency, were down 16% to 115.22 pence each in London on Monday morning.

S4 Capital said its second quarter net revenue was below budget, with May and June particularly reflecting the ‘challenging microeconomic conditions’.

The company’s like-for-like net revenue in its first-half of 2023 is expected to increase by around 5.0%, and it said it expects full-year like-for-like net revenue growth of around 2.0 to 4.0%, down from previously target 6.0 to 10%.

S4 Capital’s operational earnings before interest, tax, depreciation, and amortisation and its operational Ebitda margin were also below budget, reflecting the slower topline growth. The operational Ebitda margin target was reduced to 14.5% to 15.5%, down from 15% to 16%.

The company noted that its net debt at June 30 was approximately around £115 million, with S4 Capital expecting net debt to rise to between £180 and 220 million by year end.

‘We remain confident our talent, business model, strategy and scaled client relationships position us well for industry-leading growth in the medium term and the initial client traction we are seeing with our artificial intelligence initiatives further reinforces our confidence,’ said S4 Capital.

Copyright 2023 Alliance News Ltd. All Rights Reserved