S4 Capital (LON: SFOR), the digital advertising and marketing technology group founded by Sir Martin Sorrell, saw its shares jump on Wednesday after half-year results showed record operational EBITDA, sharply lower debt and its first-ever interim dividend.
The shares traded at 43.9p in early trading, up 11.99% from Tuesday’s close of 39.2p, having opened at 39.0p and touched a day high of 44.0p. That puts the stock close to the top of its 52-week range of 15.30p to 46.57p.
S4 Capital’s interim results, released before Wednesday’s market open, showed net revenue down 6.2% to £308.0m (4.7% like-for-like, stripping out currency and disposal effects). It is the latest in a run of periods in which top-line demand has weakened even as the group’s cost base has been cut back.
That cost discipline, as reflected in the results, drove operational EBITDA, the company’s adjusted earnings measure, to a record £38.0m, up 82.7% from £20.8m a year earlier, with margin rising 600 basis points to 12.3%. Net debt fell to £66.3m, equivalent to 0.7 times pro-forma EBITDA and comfortably inside its covenants, from £145.9m a year earlier. That improvement funded a further €40.1m buyback of its Term Loan B bank debt, cutting the balance to €249.7m from an original €375m, and a maiden interim dividend of 1.35p per share, half of adjusted basic earnings per share of 2.7p.
Sir Martin Sorrell, S4 Capital’s executive chairman, said: “We now expect 2026 like-for-like net revenue to be down mid-single digits, with operational EBITDA remaining at current analyst consensus level of £85 million and operational EBITDA margin to increase by 140 basis points.” The company also narrowed its year-end net debt target to between £50m and £80m, and said adjusted earnings per share should come in above consensus.