THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF REGULATION (EU) NO. 596/2014 ON MARKET ABUSE ("UK MAR"), AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018

 

 

S⁴Capital plc

("S⁴Capital" or "the Company" or "the Group")

Interim Results for 2026

 

Reported net revenue² £308.0 million down 6.2%, 4.7% like-for-like³  

Reported record operational EBITDA⁴ £38.0 million up 82.7%, 127.5% like-for-like, with higher proportion of operational EBITDA in the first half compared to previous years based on 2026 full year target

Reported operational EBITDA margin⁴ 12.3%, up 600 basis points, 710 basis points like-for-like

Net debt⁶ £66.3 million, 0.7x pro-forma⁹ 12 month Operational EBITDA, down £79.6 million, £76.3 million like-for-like against 30 June 2025

 

The Company has met the targeted reduction of its Term Loan B, repurchasing a further €40.1 million, subject to settlement.

This, together with the €85.2 million previously announced, reduces the outstanding Term Loan B to €249.7 million

The Board has approved an inaugural interim dividend of 1.35p per share, 50% of the adjusted basic earnings per share of 2.7p

 

2026 full year like-for-like net revenue now estimated to be down mid-single digits, with operational EBITDA⁷ remaining at current analyst consensus level of £85 million and operational EBITDA margin to increase by 140 basis points

Adjusted basic earnings per share will be in excess of current analyst consensus

Year end target net debt lowered to a range of £50 - £80 million

 

As previously signalled, subject to financial targets being met, the Board has implemented a dividend payout ratio of 50% of adjusted basic earnings per share and will recommend a final dividend for 2026 in line with that policy

 

 

£ millions	six months ended 30 June 2026	six months ended 30 June 2025			change Reported	change Like-for-like3
Billings1	891.9	925.9			(3.7%)	(1.6%)
Revenue	344.0	360.4			(4.6%)	(3.2%)
Net revenue2	308.0	328.2			(6.2%)	(4.7%)
Operational EBITDA4	38.0	20.8			82.7%	127.5%
Operational EBITDA margin4	12.3%	6.3%			600bps	710bps
Adjusted operating profit5	35.2	16.4			114.6%
Adjusting items5	(30.2)	(27.3)			(10.6%)
Operating profit/(loss)	5.0	(10.9)			145.9%
Profit/(loss) for period	(0.6)	(22.3)			97.3%
Basic loss per share (pence)	(0.1)	(3.3)			3.2
Adjusted basic earnings per share5 (pence)	2.7	0.2			2.5
Number of Monks	6,156	6,879			(10.5%)
Free cash flow Net debt6	10.4 (66.3)	16.0 (145.9)			(5.6) 79.6

 

Financial highlights

¤   Reported billings £891.9 million, down 3.7% and 1.6% like-for-like.

 

¤   Reported revenue £344.0 million, down 4.6% and 3.2% like-for-like.

 

¤   Reported net revenue £308.0 million, down 6.2% and 4.7% like-for-like. Continuing macroeconomic uncertainty exacerbated by the Middle East conflict, combined with increased capital expenditure in Artificial Intelligence (AI) infrastructure by technology clients/hyperscalers has impacted first half performance. Clients continue to be cautious leading to longer sales cycles.

 

¤   Operational EBITDA significantly improved in the first half of 2026, up 82.7% reported and 127.5% like-for-like to a record £38.0 million, with a higher proportion of operational EBITDA in the first half of 2026 compared to previous years based on 2026 full year target. This is primarily due to the annualised impact of the cost actions in the second half of 2025, a focus on reducing non-billable roles and back office efficiencies and continued disciplined cost management.

 

¤   There were circa 6,150 Monks at the 30 June 2026, down 3.0% compared to 31 December 2025, and down 10.5% compared to 30 June 2025.

 

¤   Reported operational EBITDA margin improved to 12.3%, up 600 basis points and 710 basis points like-for-like.

 

¤   Adjusted basic earnings per share 2.7p compared to 0.2p per share for first half 2025.

 

¤   Basic loss per share of 0.1p compared to 3.3p per share for first half 2025.

 

¤   The Board has approved an inaugural interim dividend of 1.35p per share, implementing the previously announced dividend payout policy of 50% of adjusted basic earnings per share.

 

¤   The Company generated free cash flow of £10.4 million compared to £16.0 million for first half 2025, and further improved liquidity resulting in net debt at the end of the period at £66.3 million or leverage of 0.7x net debt/pro-forma 12 month operational EBITDA of £98.0 million, below the Company's target of 1.0x.  

 

¤   The Company has now met the targeted reduction of its Term Loan B, repurchasing a further €40.1 million, subject to settlement. This, together with the €85.2 million previously announced, reduces the outstanding Term Loan B to €249.7 million.

 

Strategic and operational highlights

¤   Our strategy remains unchanged: we are focussed on a purely digital advertising and marketing services business for global and regional clients. Our unified digital transformation model leverages first-party data to create, produce and distribute digital advertising content via technology platforms, enabling efficiency and responsiveness, while addressing AI-driven disruption.

 

¤   Our two Practices, Marketing Services and Technology Services, guided by our promise, "faster, better, efficient and more", enable us to meet constantly evolving client behaviours and budgets, particularly in challenging economic conditions. We are capitalising on AI-driven opportunities, with recent wins demonstrating how our tools and capabilities are being actively tested and adopted by clients, including major technology platforms.

 

¤   Both Practices faced persistent headwinds during the first half due to a volatile, fragmented macroeconomic environment and consequent client caution. Marketing Services was further impacted by a scope reduction in BMW, primarily in EMEA, and the ongoing conflict in the Middle East.  Longer sales cycles, particularly within Technology Services, combined with technology clients/ hyperscalers further prioritising their budgets towards AI capital investment contributed to a decline in like-for-like net revenue. In response, the Company exercised strict cost discipline and tight control of discretionary spending to protect profitability and reduce leverage. This has resulted in the number of Monks at 30 June 2026 to be circa 6,150, down 10.5% from circa 6,900 at this time last year. This focus on efficiency significantly improved operational EBITDA and EBITDA margin.

 

¤   We continue to see significant opportunities for new business, particularly driven by our AI tools and capability. Adoption from existing clients is ramping up as clients, driven by existential threats, in Automotive, Financial Services and FMCG move from pilots to full scale adoption and our proprietary AI solutions are at the heart of all our new business efforts. Following awards from Ad Week, The One Show and Business Intelligence Group, Monks.Flow recently won AI-based Marketing Solution of the Year at the AI Breakthrough awards. In the first half of 2026 we have expanded our Automotive client base to include several major marques and one of our major FMCG clients from a purely North American remit to International. In addition, we have won assignments from clients such as LVMH, Mercado Libre, CapitalOne, Revlon, Square, Seek, Watts and Air India. These client wins span creative, media, technology and AI-driven transformation work, reflecting the Company's AI and data-centric positioning as a driver of future growth.

 

¤   Our people continue to show resilience amid macroeconomic uncertainty, maintaining momentum across our ESG strategy's three pillars: Our Responsibility to the World, People Fulfilment and One Brand. In 2026, we have focused on improving ESG data quality and driving carbon reductions in line with our Science Based Targets initiative (SBTi) targets which is reinforced by our global B Corp status and continued commitment to transparent, accountable ESG performance.

 

Outlook

¤      We expect clients to remain cautious in the near term, reflecting heightened macroeconomic uncertainty as a result of the ongoing conflict in the Middle East. This challenging environment results in more measured decision-making, particularly as technology clients/hyperscalers continue to further prioritise AI-related capital expenditure over operating expenditure, such as marketing. However, we remain confident in our strategy, business model and talent base. Combined with our scaled client relationships and the strong traction of our new go-to-market propositions, we believe we are well positioned to deliver sustainable long-term growth.

 

¤      2026 like-for-like net revenue now estimated 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.

 

¤      2026 full year expected net finance expense, excluding the one-off gain on the loan repurchase, lowered to £19 - 21 million, with an effective tax rate expected to be between 28-30%.

 

¤      As a result, adjusted basic earnings per share will be in excess of current analyst consensus

 

¤      Our targeted year end net debt range for 2026 has been lowered from £60 - £90 million to a range of £50 - £80 million and aim to maintain leverage to be below 1.0x.

 

¤      The Company's capital allocation policy is to prioritise dividends, then further debt repurchases and finally share repurchases as net debt falls further. As previously signalled, subject to financial targets being met, the Board has implemented a dividend payout policy of 50% of adjusted basic earnings per share and will recommend a final dividend for 2026 in line with that ratio.

 

¤      The Company has met the targeted reduction of its Term Loan B, repurchasing a further €40.1 million, subject to settlement. This, together with the €85.2 million previously announced, reduces the outstanding Term Loan B to €249.7 million.

 

¤      Over the longer term we continue to expect our growth to outperform our markets and operational EBITDA margins to return to historic levels of around 20%⁷.

 

Sir Martin Sorrell, Executive Chairman of S⁴Capital plc said:

"Throughout the first half of 2026, our trading reflected the continuing impact of increasingly volatile global macroeconomic conditions, heightened by increasing geopolitical risks. Clients remained cautious amid this uncertainty, with technology clients/ hyperscalers continuing to prioritise and, indeed increase, capital expenditure on expanding AI capacity over operating expenditure. The four biggest hyperscalers alone are currently projected to spend over $5 trillion on AI related capital expenditure between 2025-2030. Despite the challenging backdrop and usual, although reducing, seasonal weighting to the second half, liquidity improved significantly compared to the first half of 2025, driven by disciplined cost control and strong working capital management, resulting in a reduction in net debt.

 

The record operational EBITDA in the first half was primarily due to the impact of cost actions taken in the second half of 2025 and continued disciplined cost management. We have lowered our net debt in the first half due to our focus on working capital and liquidity, and therefore, now target a lower year end net debt range of £50 - £80 million.

 

We anticipate that clients will remain cautious in the near term reflecting heightened macroeconomic uncertainty, including the continuing conflict in the Middle East. We remain confident in our strategy, business model and talent. 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. 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.

 

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 to drive efficiency. Whilst transformational change of the marketing function has been restricted so far to verticals where there are existential threats, like Automotive, Financial services and FMCG, there are signs that this revolutionary change will spread to other verticals, particularly (ironically) if growth rates slow in the coming months. One other observation - there is a lot of chatter in the industry about 'trust'. You can't have trust without transparency. The industry media model will be moving to a "transparently transparent" model from a "transparently untransparent" model (to quote Irwin Gotlieb), given all the competitive conflict around the rights and wrongs of propriety trading and take rates."

 

A full list of alternative performance measures and non-IFRS measures together with reconciliations to IFRS or GAAP measures is set out in the Alternative Performance Measures Appendix.

 

Notes:

1.     Billings is gross billings to clients including pass through costs.

2.     Net revenue is revenue less direct costs.

3.     Like-for-like is a non-GAAP measure with 2025 numbers being translated for the same months as in 2026 applying currency rates as used in 2026. 

4.     Operational EBITDA is operating profit or loss adjusted for acquisition related expenses, non-recurring items (primarily acquisition payments tied to continued employment, amortisation and impairment of business combination intangible assets and restructuring and other one-off expenses) and recurring items (share-based payments) and includes right-of-use assets depreciation. It is a non-GAAP measure management uses to assess the underlying business performance. Operational EBITDA margin is operational EBITDA as a percentage of net revenue.

5.     Adjusted figures are adjusted for non-recurring and recurring items as defined above.

6.     Net debt excludes lease liabilities.

7.     This is a target and not a profit forecast.

8.     Net debt/pro-forma operational EBITDA as defined per the facilities agreement.

9.     Pro-forma numbers relate to unaudited non-statutory and non-GAAP consolidated results of the last 12 months applying currency rates as used in 2026. 

 

 

Disclaimer

This announcement includes 'forward-looking statements'. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's services) are forward-looking statements.

 

Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the Company's prospectus dated 8 October 2019 which is available on the news section of the Company's website. These forward-looking statements speak only as at the date of this announcement. S⁴Capital expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so.

 

No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future years would necessarily match or exceed the historical published earnings per share of the Company.

 

Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, shares in the Company.

 

Results webcast and conference call

A webcast and conference call covering the results will be held today.

 

09:00 GMT webcast (watch only) and conference call (for Q&A):

Webcast: https://brrmedia.news/SFOR_HY26

Conference call:

UK: +44 (0) 33 0551 0200

US: +1 786 697 3501

 

 

Enquiries to

S⁴Capital plc                                                                                                      

Sir Martin Sorrell, Executive Chairman                                                                            +44 (0)20 3793 0003/+44 (0)20 3793 0007

Radhika Radhakrishnan, Chief Financial Officer and Company Secretary

Scott Spirit, Chief Growth Officer

 

 

 

Interim results statement overview

As anticipated, first-half results reflect a continued challenging global macroeconomic landscape, technology clients pivoting investment toward AI infrastructure and longer sales cycles.

 

Reported billings were £891.9 million down 3.7% and 1.6% like-for-like.  

 

Reported revenue was down 4.6% to £344.0 million, down 3.2% like-for-like.

 

Reported net revenue declined 6.2%, 4.7% like-for-like.

 

Record operational EBITDA of £38.0 million compared to £20.8 million for the first half of 2025 reflects margin improvement across both Marketing Services and Technology Services, delivered through disciplined cost management. The Company delivered on a higher proportion of operational EBITDA in the first half of 2026 compared to previous years based on 2026 full year target.

 

Operational EBITDA margin of 12.3%, up 600 basis points compared to first half 2025, and 710 basis points like-for-like.

 

Net debt ended the period at £66.3 million, with leverage of 0.7x, below the target of 1.0x, supported by free cash flow generation of £10.4 million.

 

The Board has approved an inaugural interim dividend of 1.35p per share, 50% of the adjusted basic earnings per share of 2.7p implementing the previously signalled dividend payout policy.

 

Performance by Practice

 

Net revenue for Marketing Services was £281.9 million, down 4.4% like-for-like and Technology Services was £26.1 million, down 7.4% like-for-like.

 

Net revenue within the Marketing Services practice reflects ongoing caution among technology clients as they continue to prioritise and increase AI infrastructure capital expenditure over operational marketing budgets. The practice was further impacted by a scope reduction in BMW, primarily in EMEA, and the ongoing conflict in the Middle East. Performance within the Technology Services practice was similarly impacted by broader macroeconomic headwinds and sustained longer sales cycles.

 

Both Practices had delivered improved operational EBITDA and increasing margins, due to the annualised impact of the cost actions in the second half of 2025, with a focus on reducing non-billable roles and back office efficiencies and continued disciplined cost management.

 

Marketing Services operational EBITDA was £44.1 million, up 72.3% like-for-like with an operational EBITDA margin of 15.6%, up 690 basis points like-for-like. Technology Services operational EBITDA was £4.4 million, up 214.3% like-for-like with an operational EBITDA margin of 16.9%, up 1,190 basis points like-for-like.

 

Performance by geography

 

Americas reported net revenue was £249.9 million, down 3.2%, 0.8% like-for-like.

 

EMEA reported net revenue was £42.0 million, down 18.9%, 20.3% like-for-like.

 

APAC reported net revenue was £16.1 million, down 11.5%, 12.5% like-for-like.

 

New business and AI

 

We continue to see significant opportunities for new business, particularly driven by our AI tools and capability. Adoption from existing clients is ramping up as clients, driven by existential threats, in Automotive, Financial Services and FMCG move from pilots to full scaled adoption and our proprietary AI solutions are at the heart of all our new business efforts. Following awards from Ad Week, The One Show and Business Intelligence Group Monks.Flow recently won AI-based Marketing Solution of the Year at the AI Breakthrough awards. In the first half of 2026 we have expanded our Automotive client base to include several other marques, we expanded one of our major FMCG clients from a purely North American remit to International and also won assignments from clients such as LVMH, Mercado Libre, CapitalOne, Revlon, Square, Seek and Air India. These client wins span creative, media, technology and AI-driven transformation work, reflecting the Company's AI and data-centric positioning as a driver of future growth.

 

 

Our new go-to-market propositions, Orchestration Partner, Real-Time Brands, Media Acceleration and Digital Transformation are all starting to resonate strongly with clients. These are built around hyper-personalisation at scale, social media, brand strategy, platform expertise and leveraging of technology.

 

Balance Sheet

 

Net debt⁶ ended the first half at £66.3 million, or 0.7x net debt/pro-forma 12 month operational EBITDA, firmly below our target. This compared to £145.9 million at the end of June 2025, reflecting our continued focus on working capital management and improving liquidity. The balance sheet has sufficient liquidity and long-dated debt maturities and our key covenant is net debt not to exceed 4.5x the pro-forma 12 month operational EBITDA⁸.

 

ESG

 

Sustainability is embedded as an operating discipline across our unitary structure, underpinned by three foundational pillars: Our Responsibility to the World, People Fulfilment and One Brand. In 2026, rising client expectations have positioned sustainability commitments as a factor in partner selection, driving cross-functional integration of ESG and its shift from a reporting obligation to a core value driver which reinforces our focus, as a global brand, on the evolving ESG landscape.

 

We remain focused on the wellbeing of our people and their end-to-end experience. A key milestone this half-year was the launch of our updated corporate values, which we are actively embedding across our employee lifecycle. These values are already central to our refined goal-setting and performance evaluation frameworks, with plans to integrate them into our interview and onboarding processes in the coming months. To support our employees ongoing engagement, we continue to offer our AI-focused learning through the School of AI, while advancing a standardised merit cycle across the Company to ensure equitable and effective compensation decisions.

 

Summary and outlook

 

The Company continues to operate in a challenging macroeconomic environment, with clients remaining cautious and with increased capital expenditure in AI infrastructure by technology clients/hyperscalers. The Board remains confident in the Company's strategy, client relationships and long-term growth prospects.

 

The Company has generated a higher proportion of operational EBITDA from the first half performance compared to previous years based on the 2026 full year target due to the impact of the cost actions in the second half of 2025 and continued disciplined cost management. We have now also lowered our net debt in the first half due to our focus on working capital and liquidity and, therefore, target an improved lower year end net debt range of £50 - £80 million.

 

The Company now expects 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.

 

Full year expected net finance expense, excluding the one-off gain on the loan repurchase, lowered to £19 - 21 million, with an effective tax rate expected to be between 28-30%. As a result, adjusted basic earnings per share will be in excess of current analyst consensus.

 

The Company's capital allocation policy is to prioritise dividends, then further debt repurchases and finally share repurchases as net debt falls further. As previously signalled, subject to financial targets being met, the Board has implemented a dividend payout policy of 50% of adjusted basic earnings per share and will recommend a final dividend for 2026 in line with that ratio.

 

The Company has met the targeted reduction of its Term Loan B, repurchasing a further €40.1 million, subject to settlement. This, together with the €85.2 million previously announced, reduces the outstanding Term Loan B to €249.7 million.

 

Over the longer term, the Company expects to outperform its markets, restore operational EBITDA margins towards 20%.

 

The strategy of S⁴Capital remains the same. The Company's unitary, purely digital transformation model, based on first-party data fuelling the creation, production and distribution of digital advertising content, distributed by digital media and built on technology platforms to ensure success and efficiency, resonates with clients. Our promise "faster, better, efficient and more" and a unitary structure both appeal strongly, even more so in challenging economic times.

 

Financial review

Summary of results

 

£ millions	six months ended 30 June 2026	six months ended 30 June 2025			change Reported	change Like-for-like3
Billings1	891.9	925.9			(3.7%)	(1.6%)
Revenue	344.0	360.4			(4.6%)	(3.2%)
Net revenue2	308.0	328.2			(6.2%)	(4.7%)
Operational EBITDA4	38.0	20.8			82.7%	127.5%
Operational EBITDA margin4	12.3%	6.3%			600bps	710bps
Adjusted operating profit5	35.2	16.4			114.6%
Adjusting items5	(30.2)	(27.3)			10.6%
Adjusted operating profit margin5	11.4%	5.0%			640bps
Net finance expenses and loss on net monetary position	(5.1)	(14.2)			64.1%
Adjusted result before income tax5	25.8	2.2			1,072.7%
Adjusted income tax expenses5	(7.5)	(0.7)			(971.4%)
Adjusted result for the period5	18.3	1.5			1,120.7%
Adjusted basic earnings per share5 (pence)	2.7	0.2			2.5

 

A full list of alternative performance measures and non-IFRS measures together with reconciliations to IFRS or GAAP measures is set out in the Alternative Performance Measures Appendix.

 

Financial summary

 

While the first half of 2026 saw continued pressure on net revenue, the Company generated a higher proportion of operational EBITDA compared to previous years based on the 2026 full year target.

 

Reported billings were £891.9 million, down 3.7%, or 1.6% like-for-like.

 

Reported revenue was £344.0 million, down 4.6%, or 3.2% like-for-like.

 

Reported net revenue was £308.0 million, down 6.2%, or 4.7% like-for-like.

 

Reported operational EBITDA was a record £38.0 million compared to £20.8 million in the prior year, an increase of 82.7% and 127.5% like-for-like, with a higher proportion of operational EBITDA in the first half compared to previous years based on 2026 full year target. This is primarily due to the annualised impact of the cost actions in the second half of 2025, a focus on reducing non-billable roles and back office efficiencies and continued disciplined cost management.

 

There are circa 6,150 Monks at the end of the first half, down 10.5% from circa 6,900 at this time last year.

 

Operational EBITDA margin was 12.3%, up 600 basis points compared to the first half of 2025, or 710 basis points like-for-like. Our ambition remains to return full year margins to historic levels, around 20%⁷, over the longer term.

 

 

 

 

 

 

 

£ millions	Period ended 30 June 2026 Statutory results	Period ended 30 June 2026 Adjusting items	Period ended 30 June 2026 Adjusted Results			Period ended 30 June 2025 Statutory results	Period ended 30 June 2025 Adjusting items	Period ended 30 June 2025 Adjusted results
Billings1	891.9	-	891.9			925.9	-	925.9
Revenue	344.0	-	344.0			360.4	-	360.4
Net revenue2	308.0	-	308.0			328.2	-	328.2
Operational EBITDA4	38.0	-	38.0			20.8	-	20.8
Operational EBITDA margin4	12.3%	-	12.3%			6.3%	-	6.3%
Depreciation, amortisation and impairment*	(27.2)	24.4	(2.8)			(27.2)	22.8	(4.4)
Acquisition expenses	-	-	-			0.1	(0.1)	-
Share-based payments	(1.8)	1.8	-			(2.6)	2.6	-
Restructuring and other one-off expenses**	(4.0)	4.0	-			(2.0)	2.0	-
Operating profit/(loss)	5.0	30.2	35.2			(10.9)	27.3	16.4
Net finance expense and loss on net monetary position	(5.1)	(4.3)	(9.4)			(14.2)	-	(14.2)
Result before income tax	(0.1)	25.9	25.8			(25.1)	27.3	2.2
Income tax (expense)/credit	(0.5)	(7.0)	(7.5)			2.8	(3.5)	(0.7)
Result for the period	(0.6)	18.9	18.3			(22.3)	23.8	1.5
Basic (loss)/profit per share (pence)	(0.1)	2.8	2.7			(3.3)	3.5	0.2
Number of Monks	6,156	-	6,156			6,879	-	6,879
Net debt6	(66.3)	-	(66.3)			(145.9)	-	(145.9)

*Depreciation, amortisation and impairment excludes £5.9 million (H1 2025: £5.8 million) right-of-use asset depreciation.

**Restructuring and other one-off expenses includes £nil (H1 2025: £1.5 million) reversal of impairment on right-of-use assets.

 

A full list of alternative performance measures and non-IFRS measures together with reconciliations to IFRS or GAAP measures is set out in the Alternative Performance Measures Appendix.

 

Reported adjusted operating profit was £35.2 million, up from £16.4 million, after adjusting items of £30.2 million (H1 2025: £27.3 million). This primarily comprised £4.0 million of restructuring and other one off costs (H1 2025: £2.0 million) and £24.4 million of amortisation of intangible assets (H1 2025: £22.8 million).

 

Reported operating profit was £5.0 million compared to £10.9 million loss for the first half of 2025.

 

The loss for the period was £0.6 million compared to £22.3 million for the first half of 2025.

 

Adjusted basic earnings per share was 2.7p, compared to adjusted basic earnings per share of 0.2p in the first half of 2025.

 

 

 

 

 

 

 

Practice and Geographic Performance

 

£ millions	six months ended 30 June 2026	six months ended 30 June 2025			change Reported	change Like-for-like3
Marketing Services	281.9	299.0			(5.7%)	(4.4%)
Technology Services	26.1	29.2			(10.6%)	(7.4%)
Net revenue2	308.0	328.2			(6.2%)	(4.7%)
Americas	249.9	258.2			(3.2%)	(0.8%)
EMEA	42.0	51.8			(18.9%)	(20.3%)
Asia-Pacific	16.1	18.2			(11.5%)	(12.5%)
Net revenue2	308.0	328.2			(6.2%)	(4.7%)
Marketing Services	44.1	28.5			54.7%	72.3%
Technology Services	4.4	2.6			69.2%	214.3%
S4 Central	(10.5)	(10.3)			(1.9%)	(1.9%)
Operational EBITDA4	38.0	20.8			82.7%	127.5%
Marketing Services	15.6%	9.5%			610bps	690bps
Technology Services	16.9%	8.9%			800bps	1,190bps
Operational EBITDA margin4	12.3%	6.3%			600bps	710bps

 

Practice performance

 

Net revenue for Marketing Services was £281.9 million, down 4.4% like-for-like and Technology Services was £26.1 million, down 7.4% like-for-like.

 

Net revenue within the Marketing Services practice reflects ongoing caution among technology clients as they continue to further prioritise and increase AI infrastructure capital expenditure over operational marketing budgets. The practice was further impacted by a scope reduction in BMW, primarily in EMEA, and the ongoing conflict in the Middle East.

 

Performance within the Technology Services practice was similarly impacted by broader macroeconomic headwinds and sustained longer sales cycles.

 

Both Practices had delivered improved operational EBITDA and increasing margins, due to the annualised impact of the cost actions in the second half of 2025, with a focus on reducing non-billable roles and back office efficiencies and continued disciplined cost management.

 

Marketing Services operational EBITDA was £44.1 million, up 72.3% like-for-like with an operational EBITDA margin of 15.6%, up 690 basis points like-for-like.

 

Technology Services operational EBITDA was £4.4 million, up 214.3% like-for-like with an operational EBITDA margin of 16.9%, up 1,190 basis points like-for-like.

 

Central costs of £10.5 million were up 1.9% like-for-like in 2026 mainly due to the centralisation of procurement and IT. These investments have and will continue to drive further efficiencies across the Company.

 

 

Geographic performance

 

Americas reported net revenue was £249.9 million (81% of total), down 3.2%, 0.8% like-for-like.

 

EMEA reported net revenue was £42.0 million (14% of total), down 18.9%, 20.3% like-for-like.

 

APAC reported net revenue was £16.1 million (5% of total), down 11.5%, 12.5% like-for-like.

 

Cash flow

£ millions	six months ended 30 June 2026	six months ended 30 June 2025
Operational EBITDA	38.0	20.8
Capital expenditure1	(2.7)	(2.1)
Interest and facility fees paid	(9.8)	(11.9)
Interest received	1.9	1.0
Income tax paid	(3.8)	(1.8)
Restructuring and other one-off expenses paid	(5.7)	(9.2)
Change in working capital2	(7.5)	19.2
Free cash flow	10.4	16.0
Gain on loan repurchase	4.3	-
Other3	5.9	(19.0)
Movement in net debt	20.6	(3.0)
Opening net debt	(86.9)	(142.9)
Net debt	(66.3)	(145.9)

Notes:

The table reflects how the business is managed, and this is a non-statutory cash flow format. See unaudited consolidated statement of cash flows for statutory cash flow format.

1.                    Includes purchase of intangible assets, purchase of property, plant and equipment, and security deposits offset by proceeds from disposal of property, plant and equipment.

2.                    Working capital primarily includes movement on receivables, payables, principal elements of lease payments and depreciation of right-of-use assets.

3.                    Other includes foreign exchange gain of £5.6 million (H1 2025:  £18.0 million loss) and hyperinflation gain of £0.2 million (H1 2025: £0.8 million loss).

 

Net debt reduced by £20.6 million during the period, driven by free cash flow of £10.4 million, favourable foreign exchange movements of £5.6 million and a £4.3 million gain on the repurchase of debt.

 

Free cash flow for the period was £10.4 million compared to £16.0 million in the prior year. This movement was driven by an expected Q1 2026 working capital outflow. This was primarily due to a combination of both stronger year-on-year Q4 2025 collections and lower year-on-year Q4 2025 media billings. As collections normalised and trading strengthened, working capital improved in the second quarter.

 

Treasury and net debt

	six months ended 30 June 2026	six months ended 31 December 2025	six months ended 30 June 2025
Net debt reconciliation £ millions
Cash and cash equivalents	183.3	240.8	175.1
Loans and borrowings (including bank overdrafts)	(249.6)	(327.7)	(321.0)
Net debt	(66.3)	(86.9)	(145.9)

 

The Company repurchased €85.2 million of its €375 million Term Loan B at a discount during the period. The Company paid £69.6 million to repurchase £73.9 million of the loan resulting in a gain on repurchase of £4.3 million.

 

Subsequent to the period ended 30 June 2026, the Company repurchased a further €40.1 million, subject to settlement. This reduces the outstanding Term Loan B to €249.7 million.

 

The half year net debt was £66.3 million compared to £145.9 million at 30 June 2025, or 0.7x net debt/pro-forma 12 month operational EBITDA. The balance sheet has sufficient liquidity and long dated debt maturities, including the £80 million Revolving Credit Facility which remains undrawn at 30 June 2026. During the period Company complied with the covenants set in its loan agreements. The pro-forma 12-month operational EBITDA for the period to 30th June 2026 was £98.0 million. The Company is ahead of its target leverage ratio of below 1.0x net debt/pro-forma 12 month operational EBITDA.

 

The Company's key covenant is that the net debt should not exceed 4.5:1 of the earnings before interest, tax, depreciation and amortisation. This ratio is measured at the end of any relevant period of 12 months ending each semi-annual date in a financial year, as defined in the facility agreement. As at 30 June 2026, the net debt/pro-forma 12 month operational EBITDA, as defined by the facilities agreement, was 0.7x.

 

Interest and tax

 

Net finance costs were £5.1 million, a decrease of £9.1 million due to a £4.3 million gain on the partial repurchase of the TLB loan and the resultant reduction in bank interest expenses. The income tax expense for the period was £0.5 million compared to £2.8 million credit for the first half of 2025.

 

Balance sheet

 

Overall, the Company strengthened its net assets to £513.0 million as at 30 June 2026, an increase of £7.0 million compared to 31 December 2025.

 

Responsibility Statement

 

The directors confirm that these condensed unaudited consolidated interim financial statements have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

 

¤       an indication of important events that have occurred during the first six months and their impact on the condensed unaudited consolidated interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

 

¤       material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

 

The maintenance and integrity of the S⁴Capital plc website is the responsibility of the directors; the work carried out by the authors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that might have occurred to the condensed unaudited consolidated interim financial statements since they were initially presented on the website. The directors of S⁴Capital plc are listed in the S⁴Capital plc Annual Report and Accounts for the year ended 31 December 2025, with the exception of the appointment of Christian Juhl on 15 July 2026. A list of current directors is maintained on the S⁴Capital plc website: www.s4capital.com.

 

By order of the Board

 

 

 

Sir Martin Sorrell                                                                         Radhika Radhakrishnan

 

Executive Chairman                                                                    Chief Financial Officer and Company Secretary

 

About S⁴Capital

 

S⁴Capital is a purely digital advertising and marketing services business built for global, multinational, regional, and local clients and millennial-driven influencer brands. The business operates through two data and digital media driven Practices: Marketing Services and Technology Services, emphasising "faster, better, efficient and more" execution in an always-on consumer-led environment. Its unitary structure positions the Company as a systems integration partner delivering real-time relevance in the post-agency era.

The Company now has approximately 6,150 people in 34 countries with approximately 81% of net revenue across the Americas, 14% across Europe, the Middle East and Africa and 5% across Asia-Pacific. The longer-term objective is a geographic split of 60%:20%:20%. Marketing Services accounted for approximately 91% of net revenue and Technology Services 9%. The target allocation is a practice split of 75%:25%.

Sir Martin Sorrell was CEO of WPP for 33 years, building it from a £1 million 'shell' company in 1985 into the world's largest advertising and marketing services company, with a market capitalisation of over £16 billion on the day he left. Prior to that, Sir Martin was Group Financial Director of Saatchi & Saatchi Company Plc for nine years.

 

 

Unaudited consolidated interim statement of profit or loss

For the six month period ended 30 June 2026

 

Six months ended 30 June 2026   £m			Six months ended 30 June 2025   £m
	Note
Revenue	7	344.0	360.4
Direct costs		(36.0)	(32.2)
Net revenue	7	308.0	328.2
Personnel costs		(224.2)	(262.4)
Other operating expenses		(41.7)	(41.8)
Acquisition, restructuring and other one-off expenses		(4.0)	(3.4)
Depreciation, amortisation and impairment		(33.1)	(31.5)
Total operating expenses		(303.0)	(339.1)
Operating profit/(loss)		5.0	(10.9)
Adjusted operating profit		35.2	16.4
Adjusting items1		(30.2)	(27.3)
Operating profit/(loss)		5.0	(10.9)
Finance income		6.4	1.2
Finance costs		(11.1)	(15.1)
Net finance costs		(4.7)	(13.9)
Loss on the net monetary position		(0.4)	(0.3)
Loss before income tax		(0.1)	(25.1)
Income tax (expense)/credit		(0.5)	2.8
Loss for the period		(0.6)	(22.3)
Attributable to owners of the Company Attributable to non-controlling interests		(0.6) -	(22.3) -
		(0.6)	(22.3)
Loss per share is attributable to the ordinary equity holders of the Company Basic loss per share (pence)		(0.1)	(3.3)

 

Notes:

1.          Adjusting items comprises amortisation of £24.4 million (H1 2025: £22.8 million), acquisition expenses of £nil (H1 2025: £0.1 million gain), share-based payments of £1.8 million (H1 2025: £2.6 million) and restructuring and other one-off expenses of £4.0 million (H1 2025: £2.0 million).

 

The results for the period are wholly attributable to the continuing operations of the Group.

 

 

Unaudited consolidated interim statement of comprehensive income

For the six month period ended 30 June 2026

 

	Six months ended 30 June 2026   £m	Six months ended 30 June 2025   £m
Loss for the period	(0.6)	(22.3)
Other comprehensive expense
Items that may be reclassified to profit or loss Foreign operations - foreign currency translation differences	11.7	(51.4)
Other comprehensive income/(expense)	11.7	(51.4)
Total comprehensive income/(expense) for the period	11.1	(73.7)
Attributable to owners of the Company	11.1	(73.7)
Attributable to non-controlling interests	-	-
	11.1	(73.7)

Unaudited consolidated interim balance sheet

As at 30 June 2026

 

	Note	30 June 2026   £m	31 December 2025    £m
Assets
Goodwill	8	384.5	381.0
Intangible assets		237.1	258.4
Right-of-use assets		22.8	27.3
Property, plant and equipment		9.2	9.9
Interest in joint ventures and associates		0.8	0.8
Deferred tax assets		48.8	46.7
Other receivables		4.4	4.5
Non-current assets		707.6	728.6
Trade and other receivables		355.0	374.2
Current tax assets		7.1	4.0
Cash and cash equivalents		183.3	240.8
Current assets		545.4	619.0
Total assets		1,253.0	1,347.6
Liabilities
Deferred tax liabilities		(12.4)	(12.9)
Loans and borrowings		(246.9)	(324.4)
Lease liabilities		(15.3)	(19.3)
Provisions		(2.3)	(2.3)
Non-current liabilities		(276.9)	(358.9)
Trade and other payables		(434.3)	(452.9)
Contingent consideration and holdbacks	9	(6.2)	(6.2)
Loans and borrowings		-	(0.1)
Lease liabilities		(10.6)	(12.0)
Provisions		(7.1)	(8.5)
Current tax liabilities		(4.9)	(3.0)
Current liabilities		(463.1)	(482.7)
Total liabilities		(740.0)	(841.6)
Net assets		513.0	506.0
Equity
Share capital		167.5	167.5
Share premium		205.2	205.2
Other reserves		21.5	19.5
Foreign exchange reserves		(57.8)	(69.5)
Retained earnings		176.5	183.2
Attributable to owners of the Company		512.9	505.9
Non-controlling interests		0.1	0.1
Total equity		513.0	506.0

 

 

Unaudited consolidated interim statement of changes in equity

For the period ended 30 June 2026

 

 

	Share capital1 £m	Share premium £m	Other reserves2 £m	Foreign exchange reserves £m	Retained earnings/ (accumulated losses) £m	Attributable to owners of the Company £m	Non-controlling interests £m	Total equity £m
At 1 January 2025	154.9	164.9	70.7	(22.9)	209.8	577.4	0.1	577.5
Hyperinflation restatement	-	-	1.3	-	-	1.3	-	1.3
Adjusted opening balance	154.9	164.9	72.0	(22.9)	209.8	578.7	0.1	578.8
Comprehensive expense for the period
Loss for the period	-	-	-	-	(22.3)	(22.3)	-	(22.3)
Other comprehensive expense	-	-	-	(51.4)	-	(51.4)	-	(51.4)
Total comprehensive expense for the period	-	-	-	(51.4)	(22.3)	(73.7)	-	(73.7)
Transactions with owners of the Company
Dividends3	-	-	-	-	(6.1)	(6.1)	-	(6.1)
Share-based payments	-	-	0.2	-	2.4	2.6	-	2.6
At 30 June 2025	154.9	164.9	72.2	(74.3)	183.8	501.5	0.1	501.6
Hyperinflation restatement	-	-	0.9	-	-	0.9	-	0.9
Adjusted opening balance	154.9	164.9	73.1	(74.3)	183.8	502.4	0.1	502.5
Comprehensive expense for the period
Loss for the period	-	-	-	-	(2.5)	(2.5)	-	(2.5)
Other comprehensive income	-	-	-	4.8	-	4.8	-	4.8
Total comprehensive expense for the period	-	-	-	4.8	(2.5)	2.3	-	2.3
Transactions with owners of the Company
Business combinations	12.6	40.3	(54.1)	-	1.0	(0.2)	-	(0.2)
Share-based payments	-	-	0.5	-	0.9	1.4	-	1.4
At 31 December 2025	167.5	205.2	19.5	(69.5)	183.2	505.9	0.1	506.0
Hyperinflation restatement	-	-	1.5	-	-	1.5	-	1.5
Adjusted opening balance	167.5	205.2	21.0	(69.5)	183.2	507.4	0.1	507.5
Comprehensive income for the period
Loss for the period	-	-	-	-	(0.6)	(0.6)	-	(0.6)
Other comprehensive income	-	-	-	11.7	-	11.7	-	11.7
Total comprehensive income for the period	-	-	-	11.7	(0.6)	11.1	-	11.1
Transactions with owners of the Company
Dividends3	-	-	-	-	(7.4)	(7.4)	-	(7.4)
Share-based payments	-	-	0.5	-	1.3	1.8	-	1.8
At 30 June 2026	167.5	205.2	21.5	(57.8)	176.5	512.9	0.1	513.0

 

Notes:

1.     At the end of the reporting period, the issued and paid up share capital of S⁴Capital plc consisted of 670,052,897 (H1 2025: 619,636,656) Ordinary Shares having a nominal value of £0.25 per Ordinary Share.

2.     Other reserves primarily includes the deferred equity consideration arising from business combinations of £7.2 million (H1 2025: £61.3 million), made up of TheoremOne for £7.2 million, the treasury shares issued in the name of S⁴Capital plc to an employee benefit trust of £1.6 million (H1 2025: £2.6 million) and hyperinflation restatement in Argentina of £15.7 million (H1 2025: £13.3 million).

3.     The £7.4 million (H1 2025: £6.1 million) dividend represents a final dividend of 1.1 pence (H1 2025: 1.0 pence) per ordinary share in respect of the year ended 31 December 2025 which was approved during the period and subsequently paid on 10 July 2026.

Unaudited consolidated interim statement of cash flows

For the period ended 30 June 2026

		Six months ended 30 June 2026   £m	Six months ended 30 June 2025   £m
Cash flows from operating activities
Loss before income tax		(0.1)	(25.1)
Net finance costs		4.7	13.9
Depreciation, amortisation and impairment		33.1	31.5
Share-based payments		1.8	2.6
Acquisition, restructuring and other one-off expenses		4.0	3.4
Restructuring and other one-off expenses paid		(5.7)	(9.2)
Loss on the net monetary position		0.4	0.3
Other non-cash items		0.2	(0.8)
Decrease in trade and other receivables		23.2	73.5
Decrease in trade and other payables		(30.0)	(53.5)
Cash flows from operations		31.6	36.6
Income taxes paid		(3.8)	(1.8)
Net cash flows generated from operating activities		27.8	34.8
Cash flows from investing activities
Purchase of intangible assets		(1.3)	(0.6)
Purchase of property, plant and equipment		(1.5)	(1.6)
Interest received		1.9	1.0
Amounts withdrawn from security deposits		0.2	0.1
Cash flows used in investing activities		(0.7)	(1.1)
Cash flows from financing activities
Principal element of lease payments		(6.6)	(6.5)
Loan repurchase1		(69.6)	-
Repayments of loans and borrowings		(0.1)	(0.1)
Transaction costs on borrowings		-	(0.4)
Interest and facility fees paid		(9.8)	(11.9)
Cash flows used in financing activities		(86.1)	(18.9)
Net movement in cash and cash equivalents		(59.0)	14.8
Cash and cash equivalents at the beginning of the period		240.8	168.4
Exchange gain/(loss) on cash and cash equivalents		1.5	(8.1)
Cash and cash equivalents at the end of the period		183.3	175.1

 

Notes:

1. During the period the Group repurchased £73.9 million (€85.2 million) of its €375 million Term Loan B at a discount of £4.3 million (€4.9 million).

 

 

 

 

Notes to the unaudited consolidated interim financial statements

For the period ended 30 June 2026

 

1.   General information

 

S⁴Capital plc ('S⁴Capital' or 'Company') is a public limited company incorporated on 14 November 2016 in the United Kingdom. The Company has its registered office at 12 St James's Place, London, SW1A 1NX, United Kingdom. Its shares are listed on the London Stock Exchange. Under the UK Listing Rules S⁴Capital plc is in the equity shares (transition) category.

 

The condensed unaudited consolidated interim financial statements represent the results of the Company and its subsidiaries (together referred to as 'S⁴Capital Group' or the 'Group').

 

S⁴Capital Group is a tech-led, new age/new era digital advertising and marketing and technology services company.

 

2.   Basis of preparation

A.    Statement of compliance

 

This report is to be read in conjunction with the Annual Report and Accounts of S⁴Capital plc for the year ended 31 December 2025 and has been prepared in accordance with UK adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

 

The condensed unaudited consolidated interim financial statements for the 6 months period ended 30 June 2026 are a condensed set of financial information and have been prepared on the basis of the policies set out in the 2025 annual financial statements and in accordance with UK adopted IAS 34 and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority.

 

The Group has undertaken a detailed going concern assessment, reviewing cash flow projections for the next twelve months,

under both base and a severe yet plausible downside scenario. The primary assumptions in the base case are in accordance with the Group's Board-approved 2026-28 three-year plan, adjusted for latest outlook. The Directors believe that the Group's forecasts have been prepared on a prudent basis. Considering the Group's bank covenant and liquidity headroom and cost mitigation actions which could be implemented, the Directors have concluded that the Group will be able to operate within its facilities and comply with its banking covenants for the foreseeable future and therefore believe it is appropriate to prepare the unaudited consolidated financial statements of the Group on a going concern basis and that there are no material uncertainties which gives rise to a significant going concern risk. Given its debt maturity profile and available facilities, the Directors believe the Group has sufficient liquidity to match its requirements for the foreseeable future.

 

The condensed unaudited consolidated interim financial statements were authorised for issue by the Board of Directors on 4 August 2026.

 

B.    Functional and presentation currency

 

The condensed unaudited consolidated financial statements are presented in Pound Sterling (GBP or £), the Company's functional currency. All financial information in Pound Sterling has been rounded to the nearest million unless otherwise indicated.

 

C.    Principal risks and uncertainties

 

The principal risks and uncertainties facing the Group at the 2025 year end are set out in detail on pages 19 to 25 of the Annual Report and Accounts 2025. The principal risks and uncertainties facing the Group as at 30 June 2026 remain the same and relate to the following:

 

¤       Macroeconomic headwinds

¤       Operational decision making and internal efficiencies

¤       Talent lifecycle

¤       Governance and compliance

¤       Artificial intelligence

¤       Business transformation

¤       Key customers

¤       Reputation risk

¤       Information security and data privacy

¤       Competitive environment

 

3.   Significant accounting policies

The condensed unaudited consolidated financial statements have been prepared on a consistent basis with the accounting policies of the Group which were set out on pages 131 to 140 of the Annual Report and Accounts 2025.

 

New accounting standards not yet effective:

 

IFRS 18 Presentation and Disclosure in Financial Statements

 

IFRS 18 was issued in April 2024 and is effective for annual periods beginning on or after 1 January 2027, replacing IAS 1. The standard introduces new requirements for the structure of primary financial statements, including defined subtotals for operating profit and profit before financing and income taxes, and mandates disclosure of management-defined performance measures. The Group is assessing the impact of IFRS 18 on the presentation of its financial statements and related disclosures. A full impact assessment is expected to be completed during 2026. The Group does not intend to adopt IFRS 18 early.

 

4.   Critical accounting judgements and estimates

In preparing these condensed unaudited consolidated interim financial statements, the critical accounting judgements and estimates made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Annual Report and Accounts 2025.

 

5.   Statutory information and independent review

The condensed unaudited consolidated interim financial statements for the six months period ended 30 June 2026 do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2025 have been delivered to the Registrar of Companies and received an unqualified auditors' report, did not include a reference to any matters to which the auditors drew attention by way of an emphasis of matter and did not contain a statement under sections 498 (2) or (3) of the Companies Act 2006. The condensed consolidated interim financial statements are unaudited but have been reviewed by the auditors and their report is set out on the last page.

 

6.   Acquisitions

 

TheoremOne

 

Included within other reserves as at 30 June 2026 is £7.2 million, comprised of £7.2 million recognised as deferred equity consideration in 2023.

 

As at 30 June 2026, £5.8 million of holdbacks remain relating to amounts held back due to cover and indemnify the Group against certain acquisition costs and damages. The Group currently expects to settle the maximum holdback amount. The amount payable would be dependent on the amount of these acquisition costs and damages, with the minimum amount payable being £nil.

 

7. Segment information

A. Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM). The CODM has been identified as the Board of Directors of S⁴Capital Group.

During the period, S⁴Capital Group has two reportable segments as follows:

·      Marketing Services: Creative content, campaigns, and assets at a global scale for paid, social and earned media - from digital platforms and apps to brand activations that aim to convert consumers at every possible point of contact. Full-service campaign management analytics, creative production and ad serving, platform and systems integration and transition, training and education.

·      Technology Services: digital transformation services in delivering advanced digital product design, engineering services and delivery services.

The customers are primarily businesses across technology, FMCG, automobile and media and entertainment. Any intersegment transactions are based on commercial terms.

The Board of Directors monitor the results of the reportable segments separately for the purpose of making decisions about resource allocation and performance assessment prior to charges for tax, depreciation and amortisation.

The Board of the Group uses net revenue rather than revenue to manage the Group due to the fluctuating amounts of direct costs, which are recharged as part of revenue.

The following is an analysis of the Group's net revenue and results by reportable segments:

Six months ended 30 June 2026	Marketing Services £m	Technology Services £m	Total £m
Revenue	317.9	26.1	344.0
Net revenue	281.9	26.1	308.0
Segment profit1,2	44.1	4.4	48.5
Overhead costs			(10.5)
Adjusted non-recurring and acquisition related expenses3			(5.8)
Depreciation, amortisation and impairment4			(27.2)
Net finance costs and gain on net monetary position			(5.1)
Loss before income tax			(0.1)

 

Six months ended 30 June 2025	Marketing Services £m	Technology Services £m	Total £m
Revenue	331.1	29.3	360.4
Net revenue	299.0	29.2	328.2
Segment profit1,2	28.5	2.6	31.1
Overhead costs			(10.3)
Adjusted non-recurring and acquisition related expenses3			(4.5)
Depreciation, amortisation and impairment4			(27.2)
Net finance costs and gain on net monetary position			(14.2)
Loss before income tax			(25.1)

 

Notes:

1. Including £5.9 million (H1 2025: £5.8 million) depreciation of right-of-use assets and £nil impairment of right-of-use assets (H1 2025: £1.5 million reversal of impairment).

2. In arriving at segment profit, personnel costs of £199.1 million (H1 2025: £231.5 million) and £19.2 million (H1 2025: £24.2 million) were deducted from Marketing Services and Technology Services respectively.

3. Comprised of acquisition and restructuring expenses of £2.6 million (H1 2025: £1.7 million), share-based payment costs of £1.8 million (H1 2025: £2.6 million), transformation costs of £1.4 million (H1 2025: £2.6 million), £nil impairment of right-of-use assets (H1 2025: £1.5 million reversal) and £nil onerous lease provisions gain (H1 2025: £0.9 million).

4. Excluding £5.9 million (H1 2025: £5.8 million) depreciation of right-of-use assets and £nil impairment of right-of-use assets (H1 2025: £1.5 million reversal).

 

Segment profit represents the profit earned by each segment without allocation of the share of loss of joint ventures, central administration costs including Directors' salaries, finance income, non-operating gains and losses and income tax expense. This is the measure reported to the Group's Board of Directors for the purpose of resource allocation and assessment of segment performance.

 

B. Information about major customers

One (H1 2025: one) customer accounted for more than 10% of the Group's revenue during the period, contributing £64.7 million (H1 2025: £63.1 million). The revenue from this customer was attributable to Marketing Services.

 

 

8. Goodwill

 

Cost	Six months ended 30 June 2026 £m	Year ended 31 December 2025 £m
At the start of the period	675.2	697.3
Foreign exchange differences	4.6	(22.1)
At the end of the period	679.8	675.2

 

Accumulated impairment	Six months ended 30 June 2026 £m	Year ended 31 December 2025 £m
At the start of the period	(294.2)	(306.1)
Foreign exchange differences	(1.1)	11.9
At the end of the period	(295.3)	(294.2)

 

 

Net book value	Six months ended 30 June 2026 £m	Year ended 31 December 2025 £m
At the start of the period	381.0	391.2
At the end of the period	384.5	381.0

 

Goodwill represents the excess of consideration over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary at the date of acquisition.

 

9. Financial instruments

Financial instruments by category

 

Financial assets	Six months ended 30 June 2026 £m	Year ended 31 December 2025 £m
Financial assets held at amortised cost
Cash and cash equivalents	183.3	240.8
Trade receivables	210.5	213.3
Accrued income	43.0	46.4
Other receivables	91.1	98.5
Total	527.9	599.0

 

 

 

Financial liabilities	Six months ended 30 June 2026 £m	Year ended 31 December 2025 £m
Financial liabilities held at amortised cost
Trade and other payables	(386.3)	(400.5)
Loans and borrowings	(246.9)	(324.5)
Lease liabilities	(25.9)	(31.3)
Financial liabilities held at fair value through profit and loss
Contingent consideration and holdbacks	(6.2)	(6.2)
Total	(665.3)	(762.5)

 

The following table categorises the Group's financial liabilities held at fair value on the interim consolidated balance sheet. There have been no transfers between levels during the period (2025: none) and all remain measured under level 3.

Financial liabilities	Six months ended 30 June 2026 Level 3 £m	Total £m	Year ended 31 December 2025 Level 3 £m	Total   £m
Contingent consideration and holdbacks	(6.2)	(6.2)	(6.2)	(6.2)
Total	(6.2)	(6.2)	(6.2)	(6.2)

 

 

The following table shows the movement in contingent consideration and holdbacks.

Contingent consideration and holdbacks	Performance linked contingent consideration £m	Employment  linked  contingent consideration £m	Holdbacks1  £m	Total £m
Balance at 1 January 2025	(2.4)	(0.8)	(6.3)	(9.5)
Recognised in consolidated statement of profit or loss	1.7	0.7	-	2.4
Cash paid	-	0.1	0.2	0.3
Exchange rate differences	0.3	-	0.3	0.6
Balance at 31 December 2025	(0.4)	-	(5.8)	(6.2)
Balance at 30 June 2026	(0.4)	-	(5.8)	(6.2)
Included in current liabilities	(0.4)	-	(5.8)	(6.2)
Balance at 31 December 2025	(0.4)	-	(5.8)	(6.2)
Included in current liabilities	(0.4)	-	(5.8)	(6.2)
Balance at 30 June 2026	(0.4)	-	(5.8)	(6.2)

Note:

1. Holdback payments of £nil (2025: £0.2 million) includes £nil (2025: £0.2 million) of cash paid out of escrow accounts.

 

Where the contingent consideration conditions have been satisfied, consideration that is payable as equity is recognised within other reserves as deferred equity consideration.

 

The fair value of the performance linked contingent consideration has been determined based on management's best estimate of targets achieved to which the consideration is linked. The most significant unobservable input used in the fair value measurements is the performance of the acquired business. The fair value is assessed and recognised at the acquisition date, and reassessed at each balance sheet date thereafter, until fully settled, cancelled or expired. Any change in the range of future outcomes is recognised in the unaudited consolidated statement of profit or loss.

 

Holdbacks relate to amounts held by the Group to cover and indemnify the Group against certain acquisition costs and damages. The fair value of the holdbacks has been determined based on management's best estimate of the level of the costs incurred and damages expected to which the holdback is linked, which is the most significant unobservable input used in the fair value measurement.

 

10. Net debt reconciliation

 

The following table shows the reconciliation of net cash flow to movements in net debt:

	Borrowings and overdrafts2 £m	Cash £m	Net debt £m	Leases £m	Net debt including lease liabilities £m
Net debt as at 1 January 2025	(311.3)	168.4	(142.9)	(42.5)	(185.4)
Financing cash flows	0.1	14.8	14.9	6.5	21.4
Lease additions	-	-	-	(0.9)	(0.9)
Foreign exchange adjustments	(9.9)	(8.1)	(18.0)	0.9	(17.1)
Interest expense	(9.8)	-	(9.8)	(1.1)	(10.9)
Interest payment	9.9	-	9.9	1.1	11.0
Other	-	-	-	0.4	0.4
Net debt as at 30 June 2025	(321.0)	175.1	(145.9)	(35.6)	(181.5)
Financing cash flows	0.1	62.9	63.0	6.5	69.5
Lease additions	-	-	-	(1.4)	(1.4)
Foreign exchange adjustments	(6.7)	2.8	(3.9)	(0.5)	(4.4)
Interest expense	(10.5)	-	(10.5)	(1.0)	(11.5)
Interest payment	10.4	-	10.4	1.0	11.4
Other	-	-	-	(0.3)	(0.3)
Net debt as at 31 December 2025	(327.7)	240.8	(86.9)	(31.3)	(118.2)
Financing cash flows	69.7	(59.0)	10.7	6.6	17.3
Lease additions	-	-	-	(0.8)	(0.8)
Gain on loan repurchase1	4.3	-	4.3	-	4.3
Foreign exchange adjustments	4.1	1.5	5.6	(0.3)	5.3
Interest expense	(8.4)	-	(8.4)	(0.8)	(9.2)
Interest payment	8.4	-	8.4	0.8	9.2
Other	-	-	-	(0.1)	(0.1)
Net debt as at 30 June 2026	(249.6)	183.3	(66.3)	(25.9)	(92.2)

Notes:

1. During the period the Group repurchased €85.2 million of is €375 million Term Loan B at a discount.

2. This excludes transaction costs of £2.6 million (2025: £3.2 million).

 

11. Related party transactions

 

Details of compensation for key management personnel for the 12 months to 31 December 2025 are disclosed on pages 92 to 109 of the Annual Report and Accounts 2025. Additionally, the Group holds interest in S⁴S Ventures, Hoorah and Monkfilms as detailed in the Annual Report and Accounts 2025.

 

During the period ended 30 June 2026, there were transactions with S⁴S Ventures totalling £0.1 million, of which £0.4 million was outstanding. Transactions with Hoorah during the period totalled £0.2 million, of which £0.1 million was outstanding as at 30 June 2026.

 

S⁴Capital Group did not have any other related party transactions during the financial period.

 

12. Events occurring after the reporting period

 

The Group has repurchased a further €40.1 million, subject to settlement, of its Term Loan B. This reduces the outstanding Term Loan B to €249.7 million.

 

Following shareowner approval at the Annual General Meeting on 4 June 2026, the £7.4 million dividend was paid on 10 July 2026, representing a final dividend of 1.1p per ordinary share in respect of the year ended 31 December 2025.

 

On the 4 August 2026, the Board approved an inaugural interim dividend of 1.35p per share, amounting to £9.0 million. This will be paid on 6 October 2026 to all shareowners on the register as at 8 September 2026.

 

There were no other material post balance sheet events, that require adjustment or disclosure, occurring between the reporting period and the 4 August 2026.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix- Alternative Performance Measures

The Group has included various alternative performance measures (APMs) in its condensed unaudited consolidated financial statements. The Group includes these non-GAAP measures as it considers these measures to be both useful and necessary to the readers of these condensed unaudited consolidated financial statements to help them more fully understand the performance and position of the Group. The Group's measures may not be calculated in the same way as similarly titled measures reported by other companies. The APMs should not be viewed in isolation and should be considered as additional supplementary information to the IFRS measures. Full reconciliations have been provided between the APMs and their closest IFRS measures.

 

The Group has concluded that these APMs are relevant as they represent how the Board assesses the performance of the Group and they are also closely aligned with how shareowners value the business. They provide like-for-like, year-on-year comparisons and are closely correlated with the cash inflows from operations and working capital position of the Group. They are used by the Group for internal performance analysis and the presentation of these measures facilitates comparison with other industry peers as they adjust for non-recurring factors which may materially affect IFRS measures. Adjusting items for the Group include amortisation of acquired intangibles, acquisition related expenses costs, share-based payments, employment-related acquisition costs and restructuring costs. Whilst adjusted measures exclude amortisation of intangibles, acquisition costs and restructuring costs they do include the revenue from acquisitions and the benefits of the restructuring programmes and therefore should not be considered a complete picture of the Group's financial performance, that is provided by the IFRS measures.

 

The adjusted measures are also used in the calculation of the adjusted earnings per share and banking covenants as per our agreements with our lenders.

 

As there have been no acquisitions in the current or prior year, pro-forma has been removed as an alternative performance measure, as there are no impact from the acquisitions. 

 

APM	Closest IFRS measure	Adjustments to reconcile to IFRS Measure	Reason for use
Unaudited consolidated statement of profit or loss
Controlled Billings	Revenue	Includes media spend contracted directly by clients with media providers and pass-through costs (see reconciliation A1 below)	It is an important measure to help understand the scale of the activities that Group has managed on behalf of its clients, in addition to the activities that are directly invoiced by the Group.
Billings	Revenue	Includes pass through costs (see reconciliation A1 below)	It is an important measure to understand the activities that are directly invoiced by the Group to its clients.
Net Revenue	Revenue	Excludes direct costs (see reconciliation A2 below)	This is more closely aligned to the fees the Group earns for its services provided to the clients. This is a key metric used by the Group when looking at the Practice performance.
Operational EBITDA	Operating profit	Excludes acquisition related expenses, non-recurring items (primarily acquisition payments tied to continued employment, amortisation of business combination intangible assets and restructuring and other one-off expenses) and recurring share-based payments, and includes right-of-use assets depreciation. (see reconciliation A3 below)	Operational EBITDA is Operating profit or loss before the impact of adjusting items, amortisation of intangible assets and PPE depreciation. The Group considers this to be an important measure of Group performance and is consistent with how the Group is assessed by the Board and investment community.
Like-for-Like	Revenue and operating profit	Is the prior year comparative, in this case 2024, restated to include acquired businesses for the same months as 2025, and restated using same FX rates as used in 2025 (see reconciliations A4 below)	Like-for-like is an important measure used by the Board and investors when looking at Group performance.  It provides a comparison that reflects the impact of acquisitions and changes in FX rates during the year.

 

 

APM	Closest IFRS measure	Adjustments to reconcile to IFRS Measure	Reason for use
Adjusted basic earnings per share	Basic earnings per share	Excludes amortisation of intangible assets, acquisition related expenses, share-based payments, gain on debt repurchase and restructuring and other one-off expenses (see reconciliation A5 below)	Adjusted basic earnings per share is used by management to understand the earnings per share of the Group after removing non-recurring items and those linked to combinations.
Adjusted (loss)/profit for the period	(Loss)/Profit for the period	Excludes amortisation of intangible assets, acquisition related expenses, share-based payments and restructuring and other one-off expenses (see reconciliation A5 below)	Adjusted (loss)/profit for the period is used by management to understand the (loss)/profit for the Group after removing non-recurring items and those linked to combinations.
Consolidated balance sheet
Net debt	Cash and loans and borrowings	Net debt is cash less gross bank loans (excluding transaction costs and lease liabilities). This is a key measure used by management and in calculations for bank covenants (see reconciliation A6 below)	Net debt is a commonly used metric to identify the debt obligations of the Group after utilising cash in bank.
Consolidated statement of cash flows
Free cash flow	Net cash inflow/(outflow) from operating activities	Net cash flow from operating activities adjusted for investments in intangibles and property, plant and equipment, lease liabilities, interest and facility fees paid, interest received, security deposits and employment linked contingent consideration paid.	Free cash flow is a commonly used metric used to identify the amount of cash at the disposal of the Group.

 

 

Billings and controlled billings (A1)	Six months ended 30 June 2026 £m	Six months ended 30 June 2025 £m
Revenue	344.0	360.4
Pass-through expenses	547.9	565.5
Billings1	891.9	925.9
Third party billings direct to clients	1,953.9	1,377.1
Controlled billings2	2,845.8	2,303.0

Notes:

1. Billings is gross billings to clients including pass-through expenses.

2. Controlled billings are billings we influenced.

 

 

 

Net revenue (A2)	Six months ended 30 June 2026 £m	Six months ended 30 June 2025 £m
Revenue	344.0	360.4
Direct costs	(36.0)	(32.2)
Net revenue	308.0	328.2

 

 

 

Reconciliation to operational EBITDA (A3)	Six months ended 30 June 2026 £m	Six months ended 30 June 2025 £m
Operating profit/(loss)	5.0	(10.9)
Amortisation of intangible assets	24.4	22.8
Acquisition expenses	-	(0.1)
Share-based payments	1.8	2.6
Restructuring and other one-off expenses1	4.0	2.0
Depreciation of property, plant and equipment	2.8	4.4
Operational EBITDA	38.0	20.8

Notes:

1.  Restructuring and other one-off expenses relate to restructuring costs of £2.6 million (H1 2025: £1.8 million), transformation costs of £1.4 million (H1 2025: £2.6 million), reversal of impairment of right-of-use assets of £nil (H1 2025: £1.5 million reversal) and onerous lease provision of £nil (H1 2025: £0.9 million gain).

 

Like-for-Like (A4)

 

Like-for-like revenue	Marketing Services	Technology Services	Total
Six months ending 30 June 2025	£m	£m	£m
Revenue	331.1	29.3	360.4
Impact of foreign exchange	(4.0)	(1.1)	(5.1)
Like-for-like revenue1	327.1	28.2	355.3
% like-for-like revenue change	(2.8%)	(7.4%)	(3.2%)

 

Like-for-like net revenue	Marketing Services	Technology Services	Total
Six months ending 30 June 2025	£m	£m	£m
Net revenue	299.0	29.2	328.2
Impact of foreign exchange	(4.1)	(1.0)	(5.1)
Like-for-like net revenue1	294.9	28.2	323.1
% like-for-like net revenue change	(4.4%)	(7.4%)	(4.7%)

 

Like-for-like operational EBITDA Six months ending 30 June 2025	Total £m
Operational EBITDA	20.8
Impact of foreign exchange	(4.1)
Like-for-like operational EBITDA1	16.7
% like-for-like operational EBITDA change	127.5%

Note:                                                                                                                                                                                                                                                             

1. Like-for-like is a non-GAAP measure with 2025 numbers being translated for the same months as in 2026 applying currency rates as used in 2026. 

 

Adjusted basic earnings per share (A5)

Six month period ended 30 June 2026	Reported £m	Amortisation £m	Share-based payments £m	Gain on loan repurchase £m	Restructuring and other one-off expenses1 £m	Adjusted £m
Operating profit	5.0	24.4	1.8	-	4.0	35.2
Net finance expenses	(4.7)	-	-	(4.3)	-	(9.0)
Loss on net monetary position	(0.4)	-	-	-	-	(0.4)
(Loss)/profit before income tax	(0.1)	24.4	1.8	(4.3)	4.0	25.8
Income tax (expense)/credit	(0.5)	(7.0)	-	1.1	(1.1)	(7.5)
(Loss)/(profit for the year	(0.6)	17.4	1.8	(3.2)	2.9	18.3

Note:

1. Restructuring and other one-off expenses relate to restructuring costs of £2.6 million and transformation costs of £1.4 million.

 

 

 

Six month period ended 30 June 2025	Reported £m	Amortisation £m	Acquisition expenses1 £m	Share-based payments £m	Restructuring  and other one-off expenses2 £m	Adjusted £m
Operating (loss)/profit	(10.9)	22.8	(0.1)	2.6	2.0	16.4
Net finance expenses	(13.9)	-	-	-	-	(13.9)
Loss on net monetary position	(0.3)	-	-	-	-	(0.3)
(Loss)/profit before income tax	(25.1)	22.8	(0.1)	2.6	2.0	2.2
Income tax credit/(expense)	2.8	(6.5)	-	3.4	(0.4)	(0.7)
(Loss)/profit for the year	(22.3)	16.3	(0.1)	6.0	1.6	1.5

Notes:

1. Acquisition expenses relate to acquisition related advisory fees of £0.1 million gain.

2. Restructuring and other one-off expenses relate to restructuring costs of £1.8 million, transformation costs of £2.6 million, reversal impairment of right-of-use assets of £1.5 million and reversal of onerous lease provision of £0.9 million.

 

 

Adjusted basic result per share	Six months ended 30 June 2026		Six months ended 30 June 2025
Adjusted profit attributable to owners of the Company (£m)		18.3	1.5
Weighted average number of ordinary shares for the purpose of basic EPS (shares)		675,695,749	674,189,080
Adjusted basic earnings per share (pence)		2.7	0.2

 

Net debt (A6)	Six months ended 30 June 2026 £m	Year ended 31 December 2025 £m
Cash and bank	183.3	240.8
Loans and borrowings1	(249.6)	(327.7)
Net debt	(66.3)	(86.9)
Lease liabilities	(25.9)	(31.3)
Net debt including lease liabilities	(92.2)	(118.2)

 Notes:

1.               Excludes transaction costs of £2.6 million (2025: £3.2 million).

 

Free cash flow (A7)	Six months ended 30 June 2026 £m	Six months ended 30 June 2025 £m
Net cash inflow from operating activities	27.8	34.8
Interest and facility fees paid	(9.8)	(11.9)
Interest received	1.9	1.0
Purchase of intangible assets	(1.3)	(0.6)
Purchase of property, plant and equipment	(1.5)	(1.6)
Amounts withdrawn from security deposits	0.2	0.1
Principal element of lease payments	(6.6)	(6.5)
Other non-cash items	(0.3)	0.7
Free cash flow	10.4	16.0