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Highlights
- UK-based digital advertising and marketing services firm, S4 Capital plc, may move to New York for a better valuation.
- S4 Capital has recently merged Monks with 4 Mile Analytics which would potentially expand its global analytical abilities and its customer base.
UK-based digital advertising and marketing services firm, S4 Capital plc (LON: SFOR), may go for a New York listing. According to some media reports, S4 Capital’s executive chairman, Sir Martin Sorrell, has expressed his intention of moving to New York-based on the weak performance of the firm on the London Stock Exchange. According to Sorrell, the Wall Street listing would help S4 Capital to potentially get a better valuation.
S4 Capital’s merger and performance update
The London-headquartered media firm, S4 Capital, on 12 January 2022 announced the merger of Media. Monks with 4 Mile Analytics, which would considerably enhance the global analytical abilities of Media.Monks' Data & digital media practice while increasing its customer base. In 2021, the California-based data consultancy firm, 4 Mile Analytics, earned revenues of around $6.5 million, and it strives to double its revenue in 2022. Thus, the merger is expected to support S4 Capital’s future growth and the rapid expansion of its services with the help of shared expertise.
The company’s 2021 results will be published on 18th March 2022. In its third-quarter (Q3) results, it reported a revenue rise of 106%, while there was a 101% increase in the year-to-date revenue. With strong liquidity, the net debt of the company ranged from £20 million to £40 million in Q3. Even after substantial cash payments for several mergers, including 4 Mile Analytics, the debt is now ranging from £10 million to £30 million, which shows that the company has a robust operating cash flow position.
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As per Sir Martin Sorrell, S4 Capital is growing in line with its three-year plan for 2022-2024, which aims at a 25% like-for-like gross profit/net revenue growth per year. He added that the company’s budget is set in line with its three-year plan, under which the company strives to organically double its size and enhance its operational EBITDA margin. The company aims to capitalise on the opportunities it gets in 2022.
Share price performance
The tech-led advertising agency, S4 Capital plc, is listed on the main market of the London Stock Exchange since December 2016. The current market cap of the firm stands at £2,658.85 million as of 21 February 2022. The value of the company has depreciated over the past year, and it gave a negative return of -7.80%, while its year-to-date return stands at -27.32% as of 21 February 2022.
S4 Capital plc’s shares are trading at GBX 464.00, up by 1.75 per cent on 22 February 2022 at 8:27 AM GMT, and it holds a market cap of GBP 2,533.83.
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Bottomline
Several London-listed companies are planning to move to New York for better valuations, and S4 Capital may be one of them. Sorrell is reportedly considering a Wall Street listing for the company; however, no official details are out yet.
