S4 Capital Shares Surge: Exceeds Revised 2025 Guidance

S4 Capital plc (SFOR.L) shares surged more than 21% Monday morning after the company provided a fourth-quarter and full-year trading update, revealing it has surpassed both its revised guidance issued in November 2025 and the current market consensus.

The digital advertising and marketing services company demonstrated stronger-than-expected performance, coupled with significant improvements in its financial position.

The company anticipates like-for-like net revenue to be down approximately 8.5%, an outcome superior to previous expectations. Operational EBITDA margin is projected to be around 12%, indicating effective cost management amidst revenue headwinds.

A key highlight is the substantial reduction in net debt. S4 Capital expects net debt to be significantly below the consensus estimate of £133 million and also below the previously indicated range of £100-140 million. This improvement is attributed to a change in treasury management and a heightened focus on working capital efficiency, resulting in increased liquidity.

The net debt to operational EBITDA ratio is projected to be approximately 1.1x at the end of 2025, substantially better than the current consensus of 1.8x and well below the company's target of 1.5x. This demonstrates a marked improvement in the company's financial health and its ability to manage its debt obligations.

S4 Capital intends to recommend a final dividend of 1p per share, subject to the finalization of the annual results and approvals from the Board and shareholders. This proposed dividend signals the Board's confidence in the company's continued progress and improved financial stability.

Driver Breakdown:

• Treasury Management: A revamped approach to treasury operations has unlocked greater efficiency in managing cash flow.
• Working Capital Focus: Enhanced focus on optimizing working capital has freed up significant liquidity.
• Cost Discipline: Maintaining a 12% operational EBITDA margin despite revenue decline points to effective cost control measures.

Sir Martin Sorrell, Executive Chairman of S4Capital plc, stated: “Good to see both delivery beyond revised net revenue and operational EBITDA guidance and the significant improvement in liquidity. However, there is still much more to be done around net revenue and margin growth in 2026 and beyond which we will cover with the 2025 results presentation in March.

“The recommended 1p final dividend is an indication of the Board's confidence in continued improvement. In an increasingly volatile world, clients continue to carefully assess where they should expand geographically and how they can apply new technologies such as AI, Blockchain and Quantum to increasing efficiency.”

The annual results for 2025 are scheduled to be announced on March 25, 2026.