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Highlights
- 2024 revenue forecast: Slightly above consensus, with net revenue expected at £746 million and operational EBITDA at £84 million.
- Q4 improvement: Sequential progress in like-for-like net revenue, despite an 11% annual decline.
- Strong financial position: Net debt significantly below expectations at approximately £150 million, with a reduced net debt-to-EBITDA ratio of 1.6x.
S4 Capital plc (LSE:SFOR.L) has announced that trading in the fourth quarter of 2024 aligned with expectations outlined on 7th November. The company anticipates net revenue for the full year to slightly exceed consensus at £746 million, alongside operational EBITDA of £84 million.
Q4 Performance
Like-for-like net revenue showed sequential improvement during Q4, contributing to a full-year decline of approximately 11%. Operational EBITDA margins are expected to range between 11-12%, reflecting significant cost reductions implemented throughout the year.
The company's efforts to streamline operations and improve efficiency bolstered its financial performance, with operational EBITDA benefitting from these measures.
Strengthened Financial Position
S4 Capital expects net debt at the end of 2024 to be significantly below market consensus of £185 million, coming in at the lower end of the previously indicated range of £150-190 million. The improvement is attributed to strong working capital management, which reduced the company’s net debt-to-EBITDA ratio to approximately 1.6x, compared to the consensus estimate of 2.2x.
Outlook and Impairment Charge
Due to trading conditions in the latter half of 2024 and a cautious medium-term outlook, the company plans to record a non-cash impairment charge under exceptional items in its full-year results.
Looking ahead to 2025, S4 Capital anticipates net revenue and operational EBITDA to remain broadly in line with 2024 levels. The company plans to provide detailed targets for 2025 during its annual results announcement on 24 March 2025.
