S4 Capital cuts FY revenue outlook, shares slide

28th Oct 2026 09:55

(Sharecast News) - Shares of S4 Capital slid on Wednesday after the advertising, marketing and technology services company cut its full-year revenue outlook.

In an update for the third quarter, the company said 2026 like-for-like net revenue is now expected to be down high-single digits, having said in August that it would be down mid-single digits. It also said the operational EBITDA margin was expected to increase by at least 160 basis points to 13.7%, having forecast a rise of 140 basis points in August.

Expectations for operational EBITDA were unchanged at £85m, in line with consensus, while the year end target net debt was also unchanged, at between £50m and £80m.

S4 Capital said the challenging conditions witnessed in the first half continued. In the three months to September end, reported net revenue fell 6.4%, or 7.3% on a like-for-like basis, to £156.3m. In the first half, net revenue had declined 4.7% on a LFL basis.

For the nine month period, net revenue was £464.3m, down 6.2% or 5.6% on a LFL basis.

Executive chairman Sir Martin Sorrell said: "Throughout the third quarter, our trading continued to reflect increasingly volatile global macroeconomic conditions, heightened by rising geopolitical risks. Clients remained cautious amid this uncertainty, with hyperscalers and other technology clients continuing to prioritise capital expenditure on expanding AI capacity over operating expenditure. The four biggest hyperscalers are projected to spend over $5 trillion on AI-related capital expenditure between 2025 and 2030.

"Consumers continue to outpace Enterprises in AI adoption. Marketing transformation at scale has so far been concentrated in the autos, financial services and to a lesser extent the FMCG verticals, due to the existential threats of Chinese EVs and AVs, the digital fintech platforms and pricing pressure and supply chain disruption respectively."

Sorrell said the company expects clients to remain cautious in the near term, reflecting this heightened macroeconomic uncertainty, including the continuing conflicts in Ukraine and the Middle East.

"We remain confident in our strategy, business model and talent," he said. "Together with our scaled client relationships and the strong momentum behind our new go-to-market propositions, we believe we are well positioned to deliver sustainable long-term growth. While the macroeconomic environment remains uncertain, we see growing opportunities as clients become more selective about growth geographically and increasingly focused on implementing technologies such as AI, blockchain and quantum computing to drive efficiency."

At 0945 GMT, the shares were down 13% at 46.70p.

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