Navigating the new
now
S4Capital plc
Annual Report and Accounts 2024
S4Capital is a new-age/new-era digital advertising,
marketing and technology services company,
operating in the fastest-growing segment of the
advertising and marketing services market.
We are a unified, purely digital business, which
disrupts analogue models by embracing content,
data&digital media and technology services.
We work with global, multinational, regional and
local clients and for millennial-driven influencer
brands in a 24-7 environment.
We are dedicated to reducing global warming
through our net zero by 2040 pledge and
providing for Monks and their dependents.
Navigating
the new now
Read more at
s4capital.com
monks.com
1. Our business
Financial highlights
03
Worldwide presence
04
Business model
05
2. Strategic Report
Letter to shareowners
08
Progress against our strategy
10
Measuring success: Key Performance Indicators
12
Financial review
13
Principal risks and uncertainties
19
Pages 51 to 56 also form part of the Strategic Report
3. Sustainability Statement
Our sustainability commitments
26
Our impact model
28
Materiality assessment and outcome
29
Our Responsibility to the World
30
People Fulfilment
39
Task Force on Climate-Related Financial
Disclosures Report
43
Non-financial and sustainability information statement
51
Section 172(1) statement
52
4. Governance Report
Corporate governance statement of compliance
58
Leadership: Board of Directors
60
Leadership: Executive Committee
64
Executive Chairman’s statement
65
The role of the Board
67
Audit and Risk Committee Report
75
Nomination and Remuneration Committee Report
79
Remuneration Report
84
Directors’ Report
101
5. Financial statements
Independent auditors’ report
105
Consolidated statement of profit or loss
114
Consolidated statement of comprehensive income
115
Consolidated balance sheet
116
Consolidated statement of changes in equity
117
Consolidated statement of cash flows
118
Notes to the consolidated financial statements
119
Company balance sheet
158
Company statement of changes in equity
159
Notes to the Company financial statements
160
Appendix: Alternative Performance Measures
164
Shareowner information
169
In this report
S4Capital plc Annual Report and Accounts 2024
01
Our
business
Financial highlights
03
Worldwide presence
04
Business model
05
S4Capital plc Annual Report and Accounts 2024
02
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Financial highlights
For full reconciliation from statutory to non-GAAP measures, please refer to the Alternative
Performance Measures Appendix on page 164.
Notes:
1. Billings is gross billings to clients including pass-through costs.
2. Like-for-like relates to 2023 being restated to show the unaudited numbers for the previous year of the existing
and acquired businesses consolidated for the same months as in 2024 applying currency rates as used in 2024.
3. Pro-forma numbers relate to unaudited full-year non-statutory and non-GAAP consolidated results in constant
currency as if the S4Capital plc Group (the Group) had existed in full for the year and have been prepared under
comparable GAAP with no consolidation eliminations in the pre-acquisition period.
4. Operational EBITDA is EBITDA 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.
5. Operational EBITDA margin is operational EBITDA as a percentage of net revenue.
6. Adjusted operating profit is operating profit/loss adjusted for non-recurring and recurring items (as defined above).
7. Adjusted result before income tax is profit/loss before income tax adjusted for non-recurring and recurring items
(as defined above).
8. 2023 Operational EBITDA excludes the one-off benefit of £9.3 million due to the significant devaluation of the
Argentinian peso in December 2023.
9. The comparatives as at 31 December 2023 have been restated to account for the recognition of deferred tax
balances related to certain business combinations in prior years.
Billings1
£2.0bn
4.9%
Like-for-like² +8.1%
Revenue
£848.2m
−16.1%
Like-for-like -13.6%
Net revenue
£754.6m
−13.6%
Like-for-like -11.0%
Operational EBITDA4,8
£87.8m
−6.3%
Like-for-like -0.6%
Operational EBITDA margin5
11.6%
+90bps
Like-for-like +120bps
Pro-forma3 billings
£2.0bn
8.1%
Pro-forma revenue
£848.2m
−13.6%
Pro-forma net revenue
£754.6m
−11.0%
Pro-forma operational EBITDA8
£87.8m
−0.6%
Pro-forma operational EBITDA margin
11.6%
+120bps
Operating loss
-£302.8m
2023 £20.2m profit
Loss before income tax
-£330.9m
2023 -£13.9m
Basic loss per share9
-45.7p
2023 -2.2p
Market capitalisation at 21 March 2025
£202m
Net debt
£142.9m
Adjusted operating profit6
£78.3m
−4.5%
Like-for-like +1.6%
Adjusted result before income tax7
£50.2m
4.4%
Adjusted basic earnings per share9
5.2p
2023 4.4p
Share price at 21 March 2025
33.0p
Net debt ratio
1.6x
S4Capital plc Annual Report and Accounts 2024
03
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Worldwide presence
We’re
always on
A global communications business
for the new marketing age. Integrated,
agile and responsive.
Company locations
Net revenue
by region
Americas
EMEA
APAC
Americas
EMEA
APAC
78%
16%
6%
People
7,150
Countries
33
Offices
48
Unitary structure
1
S4Capital plc Annual Report and Accounts 2024
04
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
We orchestrate marketing to flow
How we solve this
Orchestration Partner
How we solve this
Real-Time Brands
How we solve this
Glass Box Media
How we solve this
Digital business transformation
We orchestrate the fragmented flow of
work across tools, agencies and processes
to improve speed, quality and ensure
brand safety. With a combination of AI
workflow and studio tools, we make more
of the right work, better, faster, cheaper
and more.
By integrating our capabilities in brand-
building creativity, social media and data
we use real time signals across channels
to dynamically adapt creativity to improve
consumer engagement and therefore
brand power.
Monks is a 100% digital media business,
and with significant capability in data and
analytics we take a ‘glass box’ approach
to client media strategy and execution.
The demands for transparency in the
industry will only increase, and we are
well placed to benefit from this.
Our Technology Services and Consulting
capabilities enable transformation
in clients via data optimisation and
management, tech stack integration,
digital consumer experiences
and other aspects of harnessing
technological innovation.
Client problem
Remove complexity
Client problem
Increase brand power
Client problem
Media and data transparency
Client problem
Legacy operating and marketing models
Marketing organisations are getting clouded
in complexity due to the increasing amount
of content needed, fragmentation of media
channels and increasing disruption of technology
solutions, while marketing budgets are under
constant pressure.
With fragmented channels and the need to
manage brand communications across social
owned and earned and media paid channels,
it’s harder than ever for brands to stand out
and make consistent connections that build
brand power.
Media is the highest proportion of a client’s
marketing investment – they want to understand
where media runs, why, who saw it and what they
did as a result. This is harder than it needs to be.
Clients need to do their own work better,
faster and cheaper, but are beholden to legacy
ways of working, and technology debt that they
need to improve returns from.
In an industry that is becoming increasingly complex and outdated, we are a digital first marketing and
technology company that disrupts analogue models by accelerating and automating the way work is done.
One P&L and one
operating model
Data, media, content,
technology and
ESG integrated
Global scale, local relevance,
sustainable impact
AI enabled by Monks.Flow
Borderless talent,
diverse perspectives
Technology partnerships,
investor relationships
Our tools
Business model
S4Capital plc Annual Report and Accounts 2024
05
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Delivering for our clients
Delivering for our clients
Scale and spend
General Motors
As General Motors’ Foundational Agency and global
Orchestration Partner, we bring simplicity, consistency,
scale and cost savings to how content is created through
technology (Adobe), automation (AI) and best-in-class
digital creative and craft.
Monks will “bring a modern approach
to real-time, efficient content development”
and “a significant change in the way that
we’re doing business”
Molly Peck
Chief Transformation Officer, General Motors
Speed and relevance
Hatch
By integrating AI workflows into the creative process for
sleep wellness company Hatch, and leveraging Google’s AI
tool Gemini, we produced personalised ad creative at faster
speeds and lower costs than ever before. The entire process
was completed in half the time of a standard campaign,
thanks to AI-powered marketing and a 97% reduction in
costs from legacy approaches. In addition to freeing up
massive resources for creatives and marketers to focus
on areas where the human touch is more critical, the AI-
supported ads outperformed legacy assets, generating 31%
better cost per purchase.
Partnership effectiveness
AWS
The remote broadcast workflow running on our long-term
partner’s platform allowed us to reduce the number of on-site
Monks by 75%, which resulted in avoided carbon emissions
related to air and ground travel. The distributed workflow
also means that directors, producers, video engineers,
audio engineers, replay operators, graphics operators,
video editors and even the announcers are able to support
the event remotely, often from the comfort of their homes.
An added benefit to Monks is the ability to now hire based
on talent rather than geography.
Personalisation at scale
Headspace
We developed a modular ad concept that pairs seasonal
emotional challenges with specific types of resources
available from Headspace, a leading provider of digital
resources for mental health and wellness. Using Monks.
Flow, we combined ad elements – AI-generated
backgrounds, product interface imagery and branded
illustrations and iconography – to produce hundreds of
assets at scale. Production hours would have quickly racked
up in a traditional design process, but with AI-powered
image generation and production, we had assets for 20
distinct use cases ready for approval quickly, and overall
cut production time by two-thirds. The AI-powered ads
converted traffic to signups at a 62% higher rate than the
control, getting mental health resources into more people’s
hands more efficiently.
Ecommerce and
creative optimisation
Diamond Foods
With the rise of ecommerce, Diamond Foods faced new
challenges in capturing online sales. To strengthen their
presence on Amazon and optimise their direct-to-consumer
(DTC) strategy, Diamond Foods partnered with Monks for
expert guidance. The results were substantial growth,
a game-changing strategy, and recognition as the 2024
AdExchanger Best in Commerce Media Award winner.
Analytics and ROI
Starbucks
Over our years-long partnership with Starbucks, we have
helped the brand develop a system that decodes how
people interact with its loyalty app and its features –
ultimately creating a user experience that nurtures that
strong connection with customers. With an AI engine that
continuously analyses user reviews across multiple markets,
Starbucks can now conduct evidence-based experiments
aimed at boosting customer lifetime value and increasing
adoption of its native apps across EMEA.
Business model continued
S4Capital plc Annual Report and Accounts 2024
06
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Strategic
Report
Letter to shareowners
08
Progress against our strategy
10
Measuring success: Key Performance Indicators
12
Financial review
13
Principal risks and uncertainties
19
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
S4Capital plc Annual Report and Accounts 2024
07
Letter to shareowners
We remain confident in our
strategy, business model and talent
Dear shareowner,
As previously highlighted, trading in the year reflected
both continued uncertainty around global macroeconomic
conditions, high interest rates and lower marketing spend
from technology clients, which account for approximately
half of revenue. In addition, there was a reduction in
transformation activity in one of our larger Technology
Services clients. However, trading in the fourth quarter
improved over the first three quarters with stronger
like-for-like net revenues, including an increase in
Data&Digital Media.
Reported billings were £1,963.0 million up 4.9% and
up 8.1% like-for-like, reflecting stronger digital media
planning and buying activity. Revenue was down 16.1% on
a reported basis to £848.2 million, down 13.6% like-for-like.
Reported net revenue declined 13.6%, or 11.0% like-for-like.
Operational EBITDA in the full year reflects improvement in
margins in Content and Data&Digital Media, due to actions
taken on costs, helped by stronger revenue performance
in the fourth quarter, whilst Technology Services’
operational EBITDA reflects the anticipated lower revenue.
We continue to maintain a disciplined and active approach
to cost management, including the number of Monks and
discretionary costs. The number of Monks at the end of the
year was around 7,150 down 7.0% from over 7,700 at this
time last year.
The Group currently reports in three practices. We have
rebranded to Monks and are now streamlining all our
current capabilities into two practices: Marketing Services
and Technology Services. We plan to initiate reporting
structures for this new services model during 2025.
Content’s net revenue declined in the year reflecting ongoing
caution and lower activity with some of our larger technology
clients. However, the year-on-year trend improved in the
fourth quarter. Content’s operational EBITDA improved to
£48.7 million (2023: £38.9 million), up 30.6% like-for-like
and on a reported basis up 25.2% versus 2023, due to
the action taken on costs. Content’s operational EBITDA
margin improved 290 basis points like-for-like and reported
280 basis points compared to 7.4% in 2023.
Data&Digital Media performed as expected in the year,
managing its costs well to match activity levels. Net revenue
grew in the fourth quarter. Operational EBITDA improved
to £46.0 million (2023: £33.5 million), up 43.3% like-
for-like and up 37.3% versus 2023 on a reported basis.
Operational EBITDA margin of 23.9% improved 780 basis
points like-for-like and reported 770 basis points, compared
to 16.2% in 2023, due to strong action on costs.
Technology Services performance was impacted by the
anticipated lower revenue from one key client, as well
as longer sales cycles for new business reflecting the
challenging ongoing macroeconomic conditions and high
interest rates. Reported operational EBITDA was down
significantly to £11.5 million (2023: £43.4 million) and
operational EBITDA margin was 13.3%, compared to
31.7% in 2023 due to the lower revenues.
On a like-for-like basis, the Americas net revenue was
down 11.8%, but with strong growth in Latin America and
now accounts for 78% of the Group’s net revenue. EMEA,
accounting for 16%, was down 5.4%, with growth in the UK
& Ireland. Asia Pacific (APAC), accounting for the remaining
6% was down 13.4%, affected by Australia and Singapore.
“Our new go-to-market
propositions are resonating
strongly with clients”
Sir Martin Sorrell
Executive Chairman
S4Capital plc Annual Report and Accounts 2024
08
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Letter to shareowners continued
Reported Americas net revenue was £587.9 million, down
14.6%, EMEA net revenue was £123.4 million, down 7.3%
and Asia Pacific was £43.3 million, down 16.7%.
The Group has taken a non-cash impairment charge net
of tax of £280.4 million reflecting trading conditions in
the second half of 2024 and the medium-term outlook
following the completion of our budget and three year
planning process. The amount is included in adjusting
items after tax.
We are seeing our AI initiatives improve visualisation
and copywriting productivity, deliver considerably more
effective and economic hyper-personalisation (better
targeted content at greater scale), delivering more
automated and integrated media planning and buying,
improving general client and agency efficiency and
democratisation of knowledge. Monks.Flow is our AI
product solution that automates marketing workflows
and we are continuing to add applications and expand its
capabilities. Our end-to-end suite of Monks.Flow products
orchestrates and helps enable our clients to more easily
implement AI solutions, particularly in visualisation and
copywriting, in hyper-personalisation at scale, in real time
focus groups and linking media planning and buying.
We are seeing significant opportunities for new business,
particularly driven by our AI tools and capability.
New business wins in the year include General Motors,
as their foundational agency, Qiddiya, Marriott, Burger
King, Panasonic, FanDuel, AliExpress, Decathlon,
Santander, SC Johnson, ICBC, Asana, CashApp, Shopify,
Coursera and Singapore Sports Hub. We are also winning
multiple exploratory assignments, as clients experiment
and explore AI applications and develop AI use cases.
AI capability is becoming more central to the agency’s
way of working and new business efforts. In this regard
the Group’s early adoption of AI and proactive approach
to staff training on AI is beginning to pay off.
Our three new Go-To-Market propositions, Orchestration
Partner, Real-Time Brands and Glass Box Media are all
starting to resonate strongly with clients. These are built
around hyper-personalisation at scale, social media,
brand strategy and transparent media buying and planning.
Environmental, Social and Governance
(ESG) strategy
We remain committed to the pillars of our ESG strategy:
people fulfilment, our responsibility to the world and
one brand. We continue to focus on improving our
external reporting, our reporting tools and governance
to help us move towards increased transparency and
effective reporting and to comply with future global
regulatory requirements.
Across the Group, we support community and charity
services through donation of hours and we’ve grown our
total For Good projects to help create a positive impact
alongside our commercial clients. We remain focused on
our people and their experiences through our robust suite
of programmes that enhance connection and development
across the organisation. Cultivating a deeper understanding
of cultural fluency remains a top priority as we continue to
foster an inclusive environment.
We continue to enjoy our B Corp status. This certification
recognises our achievements in governance and
accountability, environmental performance, social impact
and DE&I, that we are accountable to all stakeholders,
not just shareowners and that we are transparent in
our reporting.
Summary and outlook
For the Group as a whole, given the wider market
uncertainty and the priority shown by technology clients
to AI-related capital expenditure rather than operational
expenditure, such as marketing, we target net revenue and
operational EBITDA to be broadly similar to 2024. We will
continue to focus on our cost base and will take further
action to support profitability. We expect the comparatives
for the first quarter to continue to be difficult, in part due
to the residual effect of the reduction in revenue from one
key client in Technology Services. We expect an improved
performance in the second half of the year, aided by the
phasing of revenue from new business.
Our targeted range for the year end net debt is £100 million
to £140 million. We target medium term financial leverage
at the lower end of our previous range of around 1.5 times
operational EBITDA. 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%.
The strategy of S4Capital remains the same. The Group’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.
We continue to streamline and integrate our businesses,
we have rebranded to Monks and are focusing all our
current capabilities into two Practices: Marketing Services
and Technology Services. Our tagline ‘faster, better,
cheaper and more’ or ‘speed, quality, value and more’ and
a unitary structure both appeal strongly, even more so in
challenging economic times.
S4Capital plc Annual Report and Accounts 2024
09
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Progress against our strategy
Clients
Objectives
• Build scaled relationships with enterprise
clients. 20x20 goal: 20 clients with
$20 million annual revenues (‘whoppers’)
• Maintain strong partnerships with
Technology clients
2024 progress
• Integrated client and growth leadership
across whole Group
• Retained nine ‘whopper’ clients
• Largest client win in Monks history
• Industry-leading AI case studies
and awards
• 45% revenue from Technology clients
(2023: 43%)
2025 goals
• Further penetration of existing clients
• Develop more ‘whoppers’
• Strong new business performance
• Broaden client industry sector exposure
• Deliver market-leading AI case studies
• Increase purpose-driven clients
Measurement
• Number of ‘whoppers’
• % revenue by industry sector
Read more on page 6
Revenue growth
Objective
• Outpace the growth of the addressable
digital markets
2024 progress
• Net revenue declined 11.0% on a
like-for-like basis
2025 goals
• Achieve 2025 like-for-like growth target in
line with guidance
Measurement
• Broadly similar net revenue
Margin
Objective
• Improve margin, long-term target of around
20% operational EBITDA margin
2024 progress
• Operational EBITDA margin up 120bps on a
like-for-like basis
• Reduction in headcount and
operational costs
2025 goals
• Achieve 2025 operational EBITDA
margin target
• Improve productivity (utilisation
and billability)
Measurement
• Operational EBITDA margin
• Utilisation and billability rates
Net debt
Objective
• Achieve net debt target of 1.5 times
operational EBITDA
2024 progress
• Reduced net debt from £180.8 million
(1.9x operational EBITDA) to £142.9 million
(1.6x operational EBITDA)
2025 goals
• Achieve 2025 net debt target
Measurement
• Net debt/pro-forma operational
EBITDA ratio
Read more on pages 13 to 18
Read more on pages 13 to 18
Read more on pages 13 to 18
S4Capital plc Annual Report and Accounts 2024
10
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Progress against our strategy continued
Integration
Objective
• Unitary structure
2024 progress
• Simplified structure, merging Content and
Data&Digital Media practices under single
leadership team
• Unified client and growth teams
• Released integrated Go To Market
propositions to drive growth
• Improved system integration, data quality
and connectivity
• Kicked off single global ERP
system implementation
2025 goals
• Further collaboration between practices
for existing and new clients
• Continued progress with implementation
of single ERP system
• Continued focus on optimising the real
estate portfolio
Measurement
• % of cross-practice clients
Read more on page 92
People
Objective
• Attract, retain and develop the best talent
in the industry
2024 progress
• Controlled headcount in alignment with
revenue and operational EBITDA across all
three practices
• Increased utilisation of Workday to
implement talent management
• Successfully deployed Accelerate.
Monks middle management programme,
reaching over 800 applicants globally
• Successfully launched the What’s
Happening Now podcast, Motif and
Executive Leadership team meetings
2025 goals
• Integrate merit and bonus cycle process
and implementation across Marketing
Service and Technology Services
via Workday
• Ongoing adoption of growth conversation
model in Workday
• Expand the impact and alignment of
training to key business priorities inclusive
of AI tooling.
Measurement
• Growth conversations and merit cycle
Culture
Objective
• Build a diverse culture and increase
diverse representation
2024 progress
• Ran our fourth S4 Women in Leadership
programme at Berkeley University
• Recruited five Fellows for S4
Fellowship programme
• Continued the democratisation of culture
through decentralising DE&I impacts and
empowering country HR teams to execute
in partnership with interested employees
2025 goals
• Expand the reach of culture through
localised initiatives
• Host fifth cohort of S4 Women
in Leadership
• Recruit sixth cohort of S4 Fellowship
Measurement
• Successful continuation of flagship
S4 programming and one global
cultural initiative
Sustainability
Objective
• Net zero by 2040 (The Climate Pledge)
2024 progress
• Continued on our path towards net zero
by 2040
• SBTi targets formally approved in 2024
• Global B Corp certification received
in 2024
• Double Materiality Assessment undertaken
in preparation for Corporate Sustainability
Reporting Directive (CSRD)
• Improved EcoVadis score
2025 goals
• Formalise and execute SBTi transition plan
on emission reduction targets to be net zero
by 2040
• Continue to make good progress on
sustainable procurement measures
and policies
Measurement
• Carbon output reduction in line with our
SBTi transition plan
• Increase purpose-driven clients and
For Good projects
• Increase use of renewable energy
• Third party accreditation such as EcoVadis,
B Corp
Read more on pages 26 to 56
Read more on pages 39 to 42
Read more on pages 39 to 42
S4Capital plc Annual Report and Accounts 2024
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Measuring success: Key Performance Indicators
The Group uses a variety of Key
Performance Indicators (KPIs)
to monitor both financial and
non-financial performance.
Where applicable, KPIs are based
on alternative performance
measures1 to give a consistent
year-on-year comparison.
Note:
1. Further detail on alternative performance measures can be found in the
Appendix to the Annual Report and Accounts on page 164.
Financial
Non-financial
Diversity, equity and inclusion
Female
Male
Undeclared
48.6%
47.7%
3.7%
2024
2023
Gender ratios across the Group as at 31 December
2024 and 2023. For further detail on diversity,
equity, inclusion, gender equality and gender pay
gap equality see pages 39 to 42.
Like-for-like net revenue £m
£754.6m
Like-for-like -11.0%
This is more closely aligned to the fees the Group
earns for its services provided to the clients. This is
a key metric used in business when looking at both
Group and practice performance.
2024
754.6
2023
847.4
Like-for-like operational EBITDA £m
£87.8m
Like-for-like -0.6%
Operational EBITDA is operating profit before
the impact of adjusting items, amortisation of
intangible assets and property, plant and equipment
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.
2024
87.8
2023
88.3
Like-for-like operational EBITDA margin
11.6%
Like-for-like +120bps
Operational EBITDA margin is operating profit
before the impact of adjusting items, amortisation of
intangible assets and property, plant and equipment
depreciation, as a percentage of net revenue.
2024
11.6%
2023
10.4%
Carbon intensity (tCO2e) per employee
2.8 tCO2e
2023: 3.3 tCO2e
Greenhouse gas emissions for the Group, 2024 vs
2023. For further information see page 33.
Integration
32
out of 34 combinations fully integrated to date
2024
2.8
2023
3.3
S4Capital plc Annual Report and Accounts 2024
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Sustainability Statement
Governance Report
Financial statements
Billings
£1,963.0m
4.9%
Like-for-like1 8.1%
Revenue
£848.2m
−16.1%
Like-for-like −13.6%
Net revenue
£754.6m
−13.6%
Like-for-like −11.0%
Operational EBITDA
£87.8m
−6.3%
Like-for-like −0.6%
Operational EBITDA margin
11.6%
+90 basis points
Like-for-like +120 basis points
Adjusted operating profit
£78.3m
−4.5%
Like-for-like +1.6%
Operating loss
−£302.8m
2023 £20.2m profit
Note:
1. Like-for-like is a non-GAAP measure and relates to 2023 being
restated to show the unaudited numbers for the previous year of the
existing and acquired businesses consolidated for the same months
as in 2024 applying currency rates as used in 2024.
In a challenging year
we have displayed resilience
“Alongside reinvigorating
topline growth we have focused
on tight management of costs,
working capital and cash, resulting
in improved margins and lower
net debt”
Mary Basterfield
Group Chief Financial Officer
Financial review
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Financial review continued
Introduction
2024 saw challenges in our net revenue performance,
however, in addition to the top line we focused on tight
management of costs, aligning headcount more closely with
activity levels and working capital management and cash,
resulting in improved margins and lower net debt. We have
continued our finance transformation and are making good
progress with the roll out of our global finance system,
combining legal entities and integrating the finance team.
Alternative performance measures
Management includes non-GAAP measures in reporting
as they consider these measures to be both useful and
necessary. They are used by management for internal
performance analyses; the presentation of these
measures facilitates comparability with other companies,
although managements’ measures may not be calculated
in the same way as similarly titled measures reported by
other companies; and these ‘alternative performance
measures’ are useful in connection with discussions with
the investment community.
The Group uses alternative performance measures as
we believe these measures provide additional useful
information on the underlying trend, performance and
position of the Group. These underlying measures are
used by the Group for internal performance analyses,
and credit facility covenants calculations. The alternative
performance measures include ‘adjusted operating
profit’, ‘adjusting items’, ‘adjusted operational EBITDA’
and ‘EBITDA’ (earnings before interest, tax, depreciation).
The terms ‘adjusted operating profit’, ‘adjusting items’,
‘adjusted operational EBITDA’ and ‘EBITDA’ are not defined
terms under IFRS and may therefore not be comparable
with similarly titled profit measures reported by other
companies. The measures are not intended to be a
substitute for, or superior to, GAAP measures. A full list of
alternative performance measures and non-IFRS measures
together with reconciliations to IFRS measures are set out
in the Appendix to the Annual Report and Accounts on
page 164.
Financial summary
Reported billings1 were £1,963.0 million, up 4.9% and up
8.1% like-for-like2 and pro-forma3, reflecting stronger digital
media planning and buying activity. Controlled billings4,
that is billings we influenced, were approximately
£5,217.6 million (2023: £5,022.8 million).
Reported revenue was £848.2 million, down 16.1% from
£1,011.5 million and down 13.6% like‑for‑like.
Reported net revenue was £754.6 million, down 13.6%
and down 11.0% like-for-like.
Reported operational earnings before interest, taxes,
depreciation and amortisation (operational EBITDA) was
£87.8 million compared to £93.7 million in the prior year,
down 6.3% on a reported basis and down 0.6% like-for-
like. We have continued to maintain a disciplined and active
approach to cost management, including headcount and
discretionary costs.
These controls have resulted in the number of Monks
at the end of the year being around 7,150, down 7.0%
from 7,700 at this time last year and down 5.1% on the
June 2024 figure.
Notes:
1. Billings is gross billings to clients including pass-through costs.
2. Like-for-like is a non-GAAP measure and relates to 2023 being restated to show the unaudited numbers for the previous year of the existing and acquired
businesses consolidated for the same months as in 2024 applying currency rates as used in 2024.
3. Pro-forma numbers relate to unaudited full year non-statutory and non-GAAP consolidated results in constant currency as if the Group had existed in full for
the year and have been prepared under comparable GAAP with no consolidation eliminations in the pre-acquisition period.
4. Controlled billings is billings we influenced in addition to billings that flowed through the consolidated statement of profit or loss.
5. The comparatives as at 31 December 2023 and 31 December 2022 have been restated to account for the recognition of deferred tax balances related to
certain business combinations in prior years.
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Operational EBITDA margin was 11.6%, up 90 basis points
versus 10.7% in 2023 and up 120 basis points like-for-like
with improved profitability in Content and Data&Digital
Media and lower central costs, although these were
partly offset by the anticipated reduction in delivery from
Technology Services. Our ambition remains to return full
year margins to historic levels, around 20%, over the
longer term.
Reported adjusted operating profit was down 4.5% to
£78.3 million from £82.0 million, before adjusting items of
£381.1 million (2023: £61.3 million), including £18.8 million
of restructuring costs, a similar level to 2023. The increase
in adjusting items is largely due to the non-cash impairment
charge taken in the year. Adjusting items also includes
amortisation of business combination intangible assets,
restructuring, primarily related to headcount reductions,
contingent consideration, share-based payments and lease
impairment charges relating to property rationalisation.
The Group has completed its annual budget and three-
year planning process, which has been used for the
annual impairment review. The Group has taken a non-
cash impairment charge net of tax of £280.4 million,
with £196.5 million in Content and £83.9 million in
Technology Services, reflecting trading conditions in the
second half of 2024 and the subsequent medium-term
outlook following the completion of our budget and three
year planning process. This is included in adjusting items.
No impairment was recognised in the year for Data&Digital
Media, however there was minimal headroom in the
impairment modelling. More detail on the impairment review
can be found in Note 10 of the financial statements.
The reported operating loss was £302.8 million versus
a profit of £20.2 million in 2023, primarily reflecting
an increase in adjusting items with the non-cash
impairment charge. Loss for the year was £306.9 million
(2023: £14.3 million5).
Adjusted basic earnings per share was 5.2p, versus
adjusted basic earnings per share of 4.4p5 in 2023,
up 18.2%. Basic loss per share was 45.7p (2023: 2.2p5).
Financial review continued
1,963.0
Billings £m
2024
1,890.5
2022
1,870.5
2023
11.6
Operational EBITDA margin %
2024
13.9
2022
10.7
2023
848.2
Revenue £m
2024
1,069.5
2022
1,011.5
2023
78.3
Adjusted operating profit £m
2024
114.1
2022
82.0
2023
754.6
Net revenue £m
2024
891.7
2022
873.2
2023
87.8
Operational EBITDA £m
2024
124.2
2022
93.7
2023
Operational EBITDA and margin £m/%
£125.0
£100.0
£75.0
£50.0
£25.0
£0.0
30%
25%
20%
15%
10%
5%
0%
FY 2021
FY 2022
FY 2023
FY 2024
Profit
% margin
£150.0
£101.0
18.0%
13.9%
£124.2
£93.7
10.7%
£87.8
11.6%
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Practice performance
Content practice’s reported net revenue was down 10.1%
and down 7.4% like-for-like and reported operational
EBITDA was £48.7 million, up 25.2% versus 2023 and up
30.6% like-for-like. Content practice’s operational EBITDA
margin improved to 10.2%, compared to 7.4% in 2023,
despite the lower revenue, reflecting a reduction in the
number of Monks and other cost savings as compared to
2023. We continue to focus on integration and improving
the operating model for Content.
Data&Digital Media practice’s reported net revenue was
down 7.2% and down 3.7% like-for-like and reported
operational EBITDA was £46.0 million, up 37.3% from
the last year and up 43.3% like-for-like. Data&Digital
Media practice’s operational EBITDA margin was 23.9%,
compared to 16.2%, due to tight cost management
in 2024 and cost reduction actions taken in the latter
months of 2023.
Technology Services practice’s reported net revenue
was down 36.7% and down 35.3% like-for-like.
Reported operational EBITDA of £11.5 million was down
73.5% from the prior year, down 71.8% like-for-like
and delivered an operational EBITDA margin of 13.3%
compared to 31.7% in 2023. This primarily relates to
the reduction in transformation revenue from one large
client, as well as longer sales cycles for new business.
Operational EBITDA was significantly impacted by the
reduction in revenue and, given the scale of the reduction
in revenue, this has impacted margin.
Reported central costs of £18.4 million were down 16.7%
due to tight cost control.
Financial review continued
Net revenue split by practice %
Content
63.0%
DDM
25.5%
TS
11.5%
Performance by practice
2024
£m
2023
£m
Lfl YOY
Net revenue
754.6
873.2
(11.0%)
Content
475.5
528.9
(7.4%)
Data&Digital Media
192.4
207.3
(3.7%)
Technology Services
86.7
137.0
(35.3%)
Operational EBITDA
87.8
93.7
(0.6%)
Content
48.7
38.9
30.6%
Data&Digital Media
46.0
33.5
43.3%
Technology Services
11.5
43.4
(71.8%)
Central
(18.4)
(22.1)
(16.0%)
Operational EBITDA margin
11.6%
10.7%
120bps
Content
10.2%
7.4%
290bps
Data&Digital Media
23.9%
16.2%
780bps
Technology Services
13.3%
31.7%
(1,710bps)
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Financial review continued
“Free cash flow for 2024
was £37.8 million, an increase
of £24.0 million compared
to 2023”
Net revenue split by region%
Americas
77.9%
EMEA
16.4%
APAC
5.7%
Geographic performance
The Americas reported net revenue was £587.9 million
(78% of total), down 14.6% from last year. Like-for-like,
the Americas net revenue was down 11.8%, reflecting lower
revenue from one large Technology Services client and
continuing client caution particularly with our technology
clients. We saw strong growth in Latin America, reflecting
success with our local business.
EMEA reported net revenue was £123.4 million (16%
of total), down 7.3% from last year. Like-for-like, EMEA
net revenue was down 5.4%, strengthened by the UK’s
performance, but primarily reflecting slower growth and
client caution.
APAC reported net revenue was £43.3 million (6% of
total), down 16.7%. Like-for-like APAC net revenue was
down 13.4%, affected by Australia and Singapore, but also
reflecting client caution and local market conditions.
Cash flow
Year ending
31 December
2024
£m
Year ending
31 December
2023
£m
Operational EBITDA
87.8
93.7
Capital expenditure1
(7.5)
(10.2)
Interest and facility fees paid
(29.1)
(26.7)
Interest received
2.1
–
Income tax paid
(9.0)
(20.5)
Restructuring and other one-off
expenses paid
(21.1)
(20.8)
Change in working capital2
14.6
(1.7)
Free cash flow
37.8
13.8
Mergers & Acquisitions
(9.9)
(80.8)
Other3
10.0
(3.6)
Movement in net debt
37.9
(70.6)
Opening net debt
(180.8)
(110.2)
Net debt
(142.9)
(180.8)
Notes:
1. Includes purchase of intangible assets, purchase of property, plant and
equipment and security deposits.
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, hyperinflation impacts and share
buy‑backs.
Free cash flow for 2024 was £37.8 million, an improvement
of £24.0 million compared to 2023, with a working capital
inflow and lower cash tax paid, partially offset by modestly
increased cash interest costs. Cash paid in relation to
business combinations (M&A) decreased £70.9 million
versus the prior year to £9.9 million, as we materially
completed payments for prior year combinations early
in the year.
-11.8%
Net revenue growth by region, like-for-like %
Americas
2024
2023
-5.4%
EMEA
-13.4%
APAC
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Treasury and net debt
The year end net debt was £142.9 million
(2023: £180.8 million) or 1.6x net debt/pro-forma
operational EBITDA. During the year S4Capital Group
(as defined in its facilities agreement) complied with the
covenants set in that agreement, that S4Capital Group
will ensure that the net debt will not exceed 4.5:1 of the
pro-forma earnings before interest, tax, depreciation,
and amortisation, 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. The pro-
forma operational EBITDA for the year was £87.8 million.
As at 31 December 2024, the net debt/pro-forma EBITDA,
as defined by the facilities agreement, was 1.7x.
The balance sheet has sufficient liquidity and long
dated debt maturities. The duration of the 2021 facilities
agreement is seven years in relation to the Term Loan B,
therefore the termination date is August 2028 and five
years in relation to the RCF, therefore the termination date
was August 2026. Post year end, £80 million of the RCF
facility has been extended to February 2028, with all four
relationship banks extending on the same terms, with the
remaining £20 million terminating in August 2026.
The RCF remains undrawn as at 31 December 2024.
Net debt reconciliation
2024
£m
2023
£m
Cash and bank
168.4
145.7
Loans
(311.3)
(326.5)
Net debt
(142.9)
(180.8)
Lease liabilities
(42.5)
(49.0)
Net debt including lease liabilities
(185.4)
(229.8)
Interest and tax
Consolidated statement of profit or loss net financing costs
were £26.4 million (2023: £35.4 million), a decrease of
£9.0 million due to favourable exchange rates in the year.
The profit or loss tax credit for the year was £24.0 million
(20235: £0.4 million expense).
Balance sheet
Overall the Group reported net assets of £577.5 million as
at 31 December 2024, which is a decrease of £314.4 million
compared to 31 December 20235, driven mainly by the
impairment to goodwill and intangible assets recognised
during the year.
Acquisitions
There were no material acquisitions completed
during 2024.
Outlook/guidance
We expect clients to remain cautious in the near term,
as there are increasing concerns about macro uncertainty
and the impact of tariffs. Technology clients continue
to focus spending on AI-related capital expenditure,
rather than operating expenditure, such as marketing.
However, in Technology Services we expect the growth
headwind from one key client to continue in the first half
with an improving trajectory in the second half supported
by new business.
For the Group as a whole, we are targeting both net
revenue and operational EBITDA to be broadly similar to
2024. We expect the comparatives for the first quarter to
continue to be difficult, in part due to the residual effect of
the reduction in revenue from one key client in Technology
Services. We expect an improved performance in the
second half of the year, aided by the phasing of revenue
from new business.
Our net debt is expected to continue to reduce in 2025
reflecting positive free cash flow, which in 2024 was
£37.8 million. Our targeted range for the year end is
£100 million to £140 million. We now aim for financial
leverage over the medium term of around 1.5 times net
debt to operational EBITDA, which is the lower end of
our previous target range. As a measure of confidence in
the future the Board is proposing to pay a dividend of 1p
per share.
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%.
Financial review continued
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Principal risks and uncertainties
We believe that effective risk
management is important to
support the financial strength
and resilience of the Group and
for delivering its business strategy.
As part of the Group’s strategy to enhance its resilience
and seek to deliver long-term growth, the Head of Risks
created an Enterprise Risk Management (ERM) framework
in 2023, which has been adopted at a Group level, and is
used across the global organisation. The framework is used
to inform the Board of the key risks, using both a ‘top down’
and ‘bottom up’ approach to provide a holistic view of the
key operational, financial, commercial and strategic risks
facing the business.
The Board has ultimate responsibility for the Group’s
approach to risk management and internal control.
On behalf of the Board, the Audit and Risk Committee
oversees risk management for the Group. Both the
Audit and Risk Committee and Board have reviewed and
approved the Group’s principal risks. In addition, each
principal risk has a senior leader owning it, who is also
responsible for documenting the corresponding risk
response plan, which is submitted to the Head of Risks
for review and monitoring.
Risks
The principal risks and uncertainties that the Board believes
could have a significant impact on the Group are set out
on pages 20 to 22. Other, less material risks (including
emerging risks) are monitored by the Head of Risks and
discussed at the Audit and Risk Committee or other
appropriate internal forums.
Likelihood
Impact
1
2
3
4
5
8
9
7
6
10
Risk description
1
Macroeconomic and geopolitical headwinds could result in
existing clients reducing spend and potentially limiting new
business opportunities.
2 Limits to market visibility and changing client budgets,
combined with a complex internal budgeting and forecasting
process, may create volatility in forecasts and results, which
with a complicated data landscape, could lead to internal
inefficiencies and slow down operational decision making.
3 If there is inadequate management of the talent lifecycle,
from succession planning for key roles, through to personnel
development, or below market salaries, this could result in
talent gaps, high staff turnover or loss of key talent.
4 If the Group’s governance, compliance and ESG structure and
processes are not robust, this could impact compliance with
Corporate Governance regulations or best practice, or not meet
client and investor requirements and expectations.
5 Artificial Intelligence (AI) is a disruptive technology that can
impact the standard commercial models in our industry, as well
as scale up and down the need for specific teams and talent in
the business. AI is also considered to be a business opportunity
as well as a risk, as the Group considers AI to have considerable
upsides to its commercial offering and support processes.
6 If the integration journey to further simplify our structure with
clearer mandates, greater collaboration, efficiencies and
unification is not completed in a timely manner, this could
constrain sustainable and profitable growth.
7 Concentration of clients and suppliers in certain sectors
creates a risk of material financial disruption if there is a sudden
relationship breakdown or contract loss, or more stringent
regulation in certain sectors.
8 Risk of share price volatility if investors’ expectations are not
met through consistent and clear corporate messaging.
9 If there are insufficient controls over Information Security
or Data Privacy, there is a risk of a security breach, non-
compliance with client contracts, or regulatory breach.
10 Increased competitive offerings and low barriers to entry
in the industry may impede new business opportunities or
erode margins.
The key changes and movements in the risks since the prior
year have been as follows:
Risk 1 (Macroeconomic headwinds): The risk wording
was updated to include geopolitics as a trigger of the
macroeconomic risk materialising. This was to recognise
the potential disruption to the global Group from the high
number of global and regional hostilities and potential
conflicts that could interrupt economic activity.
Risk 4 (Governance and compliance): The risk is deemed
to have fallen in likelihood given the work performed
internally on the global roll-out of new policies and training
programmes across a multitude of compliance and
governance areas.
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Principal risks and uncertainties continued
Risk
Description
Risk response
Risk trend
1. Macroeconomic headwinds
Macroeconomic and geopolitical headwinds could
result in existing clients reducing spend and
potentially limiting new business opportunities.
• Strengthening the go-to-market proposition to increase the pipeline of potential ‘Whopper’ and
‘Whoppertunity’ clients.
• Continuing to widen the Group’s client and geographical mix to increase contribution of diverse
regions and sectors beyond technology.
• Business transformation programme to improve profitability, enhance delivery and
increase accountability.
• Improved planning processes for all ‘Whopper’ and ‘Whoppertunity’ clients.
2. Operational decision making and internal efficiencies
Limits to market visibility and changing client
budgets, combined with a complex internal
budgeting and forecasting process, may create
volatility in forecasts and results, which with a
complicated data landscape, could lead to internal
inefficiencies and slow down operational
decision making.
• More detailed analysis being performed of addressable markets, as well as more discussion
of Go-To-Market propositions as part of monthly performance reviews
• Updated internal controls being rolled out to ensure consistent forecasting practices across
the Group.
• Enhanced billability and utilisation reporting being adopted across the Group.
• Formalised accountabilities for delivery between relevant client, growth and operations teams
through regular performance reviews.
3. Talent lifecycle
If there is inadequate management of the talent
lifecycle, from succession planning for key roles,
through to personnel development, or below
market salaries, this could result in talent gaps,
high staff turnover or loss of key talent.
• Single HR platform rolled out to better manage employee performance and administration.
• Board and practice CEOs making final decisions on organisational structures and ensuring
appropriate budgeting matches for pay and performance.
• Review of incentive schemes to retain key talent.
• Increased DE&I forums and mental health support for employees.
Risk 5 (Artificial intelligence): The commercial risks
associated with the widespread increasing adoption of
AI by both competitors and clients creates an enhanced
risk of disruption to the execution of the Monks strategy,
although the focus continues to be on the considerable
opportunities and upsides of the Group’s early and market-
leading adoption of AI technologies.
Risk 6 (Business transformation): Following the
announcement in the middle of 2024 of the Group’s
move from three practices to two under new branding,
the integration risk has been reassessed and updated to
reflect the evolution away from integration of acquisitions,
to transforming and streamlining the business under the
unification process.
Risk 7 (Client concentration): Revenue continues to be
concentrated in the Group’s largest clients, and the
upweighting of the risk reflects the potential effect on
the Group’s performance if there is a sudden loss of a
key client. The wording of the risk has also been updated
to reflect regulatory challenges some clients may face,
such as advertising restrictions in some sectors.
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Risk
Description
Risk response
Risk trend
4. Governance and compliance
If the Group’s governance, compliance and ESG
structure and processes are not robust, this could
impact compliance with Corporate Governance
regulations or best practice, or not meet client
and investor requirements and expectations.
• Compliance framework has been updated with a more formalised annual training schedule to be
rolled out for all staff.
• Updated minimum control set being established to comply with the updated Corporate Governance
Code and formalise the link between risks and controls.
• ESG SteerCo established to meet regulatory requirements and create formalised accountabilities for
delivery of agenda.
• Annual policy reviews formalised with appropriate oversight and review on an annual basis for
key policies.
• A Governance Framework has been established and is being rolled out to strengthen the Group in
meeting its obligations.
5. Artificial intelligence (AI)
Artificial Intelligence is a disruptive technology that
can impact the standard commercial models in our
industry, as well as scale up and down the need for
specific teams and talent in the business. AI is also
considered to be a business opportunity as well
as a risk, as the Group considers AI to have
considerable upsides to its commercial offering
and support processes.
• Investment in flagship Monks.Flow product that aligns marketers with AI and is being rolled out with
new and existing clients.
• Weekly calls on the use of AI across all teams and functions of the business to embed its use on
workflow and showcase successes.
• Ongoing training and enablement programmes on use of AI.
• Continuing to forge strong relationships with key technology companies on utilisation and execution
of AI tools.
6. Business transformation
If the integration journey to further simplify
our structure with clearer mandates, greater
collaboration, efficiencies and unification is not
completed in a timely manner, this could constrain
sustainable and profitable growth.
• One Monks Integration Program to streamline the organisation to create greater accountabilities.
• Creating a single set of rules and categories under a single platform to track utilisation and billability,
and support better margin management and resource allocation.
• Rationalising the number of tools for improved efficiency and consistency of business information
and data.
• Establishing new business processes to improve pricing strategies and have an improved view
of margins.
Principal risks and uncertainties continued
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Risk
Description
Risk response
Risk trend
7. Key customers
Concentration of clients and suppliers in certain
sectors creates a risk of material financial
disruption if there is a sudden relationship
breakdown or contract loss, or more stringent
regulation in certain sectors.
• Enhanced Go-To-Market proposition launched publicly to streamline and clarify the Group’s
client offering.
• ‘Whopper’ Strategy of increasing the number of $20 million+ revenue clients, to reduce
concentration risk.
• Ongoing market offering that differentiates the Group against competitors.
8. Reputation risk
Risk of share price volatility if investors’
expectations are not met through consistent
and clear corporate messaging.
• Regular communication with investors and analysts through roadshows and conferences.
• Rolling out of updated Communications Guidelines to ensure responsible and consistent messaging.
• Use of trusted third parties to assist with timing and consistency of messaging.
9. Information security and data privacy
If there are insufficient controls over Information
Security or Data Privacy, there is a risk of a security
breach, non-compliance with client contracts,
or regulatory breach.
• Ongoing compulsory all-employee training on significant information security (‘Infosec’) and
Privacy topics.
• Ongoing ISO 27001 certification programme being executed in key offices.
• Security controls deployed in critical products including Monks.Flow.
• InfoSec compliance assessments being conducted for scaled clients, with improvement plans
rolled out for relevant areas of enhancement.
• Privacy Champions network created to embed privacy best practice in the business.
• Business capabilities recording of processing activities in all practices and Monks.Flow.
• Increasing incorporation of Privacy by Design into business processes.
10. Competitive environment
Increased competitive offerings and low barriers
to entry in the industry may impede new business
opportunities or erode margins.
• Evolution of the Group’s service offering, ensuring that it is leading edge. Current focus is on
Metaverse, and most importantly, AI.
• Three-year strategic planning process to identify opportunities and risks.
• Ongoing investment in talent and technological tools to enhance the Group’s differentiated offering.
Principal risks and uncertainties continued
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Viability Statement
In accordance with Provision 31 of the UK Corporate
Governance Code 2018, the Board of Directors of S4
Capital Group (‘the Group’) has assessed the prospects
and viability of the Group over a period of three years
from 1 January 2025. The three-year period has been
chosen as it aligns with the Group’s strategic planning
cycle, the rapidly changing landscape in the marketing
and advertising industry, and the time horizon typically
employed for the assessment of industry-specific risks
and uncertainties.
The selection of a three-year period also allows the
Group to balance short-term responsiveness with long-
term strategic planning, reflecting our focus on agility,
adaptability, and innovation. This period is deemed
appropriate considering the following factors:
1. Industry dynamics: The marketing and advertising
industry is characterised by rapid technological
advancements (including the impact of AI), evolving
consumer preferences, and the need for constant
innovation. A three-year period allows the Group to
monitor and adapt to these changes while maintaining
a forward-looking perspective on future opportunities
and challenges.
2. Competitive landscape: Given the fast-paced nature of
the industry, it is essential for the Group to maintain a
competitive advantage by anticipating and responding
to emerging trends and client demands. A three-year
period is suitable for assessing our competitive position
and developing strategies to maintain and strengthen
our market share.
3. Environmental risks: The Group recognises the
importance of addressing environmental risks, including
climate change and resource scarcity. A three-year
period allows the Group to assess and manage the
potential impact of these risks on its operations and
implement measures to minimise any adverse effects.
4. Financial resilience: A three-year period aligns with the
Group’s budgeting and forecasting cycle, enabling the
Board to evaluate the financial resilience of the business
while considering potential risks and uncertainties.
The Board has set the strategy for the Group within the
digital marketing and advertising sector, considering key
factors such as market dynamics, competitive landscape,
technological developments, regulatory environment
and the Group’s financial resilience. The Board has also
reviewed the Group’s risk management framework,
which identifies, evaluates, and mitigates significant risks
to the business, including both internal and external factors,
with particular attention to environmental risks.
Key assumptions underpinning the viability assessment
include the following:
1. Sustainable revenue growth driven by the increasing
demand for digital marketing and advertising solutions
and our ability to respond effectively to industry trends.
2. Successful integration and synergy realisation from
strategic mergers and acquisitions, further enhancing
our service offerings and expanding our global footprint.
3. Adherence to a disciplined financial strategy, focusing on
maintaining a prudent level of debt and ensuring access
to adequate sources of funding.
4. Compliance with relevant laws and regulations,
as well as our commitment to upholding the standards
of corporate governance.
5. Effective management of key risks, including
economic, operational, environmental and reputational
risks, through the implementation of robust
mitigation strategies.
The Board of Directors has performed a robust assessment
of the principal and emerging risks and uncertainties that
could threaten the business model, future performance,
solvency or liquidity of the Group. The assessment includes
an evaluation of the Group’s resilience to these threats
in severe but plausible scenarios. The principal risks
and uncertainties that the Board believes could have a
significant adverse impact on the Group’s business are set
out on pages 20 to 22.
In the downside scenario, the Group models a considerable
decline in demand during 2025 and 2026, resulting in a
significant 10% reduction in net revenue along with a 6%
reduction in operating costs when compared to the Board-
approved three-year plan forecasts.
The results of our stress test in the downside scenario
indicate that the Group maintains adequate liquidity
throughout the evaluation period without breaking any
existing debt covenants, demonstrating resilience under
these challenging conditions.
Principal risks and uncertainties continued
S4Capital plc Annual Report and Accounts 2024
23
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
The Board can leverage a variety of potential mitigating
actions to control costs and manage cash flow.
A combination of the following mitigating actions (all of
which would be fully under the Group’s control) could be
leveraged to achieve over and above the level of operating
cost reductions assumed in the downside scenario,
if required:
1. Workforce planning: Review the Group’s workforce and
implement measures to optimise resource allocation,
including potential hiring freezes, voluntary redundancy
programmes, or reskilling initiatives.
2. Cost reduction: Identify and implement cost-saving
measures across the organisation, including further
potential reductions in discretionary spending and
operational efficiency improvements.
3. Portfolio optimisation: Re-evaluate the Group’s
product and service offerings to focus on high-
margin, high‑demand areas, while discontinuing
underperforming or low-margin products and services.
4. Financial management: Review the Group’s financial
position and explore options for restructuring its debt,
such as renegotiating loan terms, refinancing existing
debt, or securing alternative sources of financing.
In addition to the mitigating actions outlined above, the
Group has access to a fully undrawn Revolving Credit
Facility (RCF) of £100 million which matures in August 2026
with £80 million extended until February 2028. This facility
serves as an additional financial resource that can be
utilised to manage liquidity, support operational stability,
and address any unforeseen challenges or opportunities
that may arise during the assessment period.
Based on the outcome of this comprehensive assessment,
the Board has a reasonable expectation that S4Capital
plc Group will be able to continue in operation and meet
its liabilities as they fall due over the three-year period
of assessment. The Board acknowledges that there are
inherent uncertainties in any forward-looking analysis,
and therefore, it will continue to monitor and update the
Group’s risk management framework and business strategy
as needed.
The Strategic Report on pages 7 to 24 was approved by
the Board of Directors on 23 March 2025 and signed
on its behalf by:
Sir Martin Sorrell
Executive Chairman
23 March 2025
Mary Basterfield
Group Chief Financial Officer
23 March 2025
Principal risks and uncertainties continued
S4Capital plc Annual Report and Accounts 2024
24
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
3
Sustainability
Statement
Our sustainability commitments
26
Our impact model
28
Materiality assessment and outcome
29
Our Responsibility to the World
30
People Fulfilment
39
Task Force on Climate-Related Financial
Disclosures Report
43
Non-financial and sustainability
information statement
51
Section 172(1) statement
52
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
S4Capital plc Annual Report and Accounts 2024
25
“We believe that technology and
creativity can be used as forces for
good. In our industry, we primarily
serve the needs of our clients, but
it should also be a consideration
whether the technology and
creativity we develop can be used in
a different environment, where the
outcome is beneficial for the people
and planet”
Regina Romeijn
Global Head of ESG
Navigating change, driving efficiency
As we navigate the complexities of 2024 and the year
ahead, we should acknowledge the shifts impacting
ESG, our people, our industry and the world at large.
The convergence of technological advancements,
geopolitical changes and economic pressures demands
that we accelerate change and act quickly.
This year has marked significant success for the Group
in relation to our ESG efforts. We achieved global B Corp
Certification, underscoring our commitment to balancing
profit with purpose and advancing our ESG initiatives.
In addition, our Science Based Targets initiative (SBTi)
targets were accredited and approved, reinforcing our
commitment to measurable emissions reductions.
The changes in global frameworks and legislation, such as
the EU’s Corporate Sustainability Reporting Directive
and California’s climate-related laws, show increased
environmental reach and alignment of transparent reporting
globally. We applaud the eventual impact these legislations
will have in speeding up internal data gathering processes
and in requiring transparency on our overall governance.
New legislation introduces new levels of complexity for
robust data gathering and disclosures. This necessitates
continuous efforts to transform and establish a robust
compliance and reporting structure, spanning cross-
functional teams to integrate ESG into our daily operations
in a systematic and controlled manner. But the focus
on legislative readiness and ESG reporting may divert
attention from critical ESG issues or impact, especially as
some political leaders retreat from net-zero commitments.
This increases the risk of further inaction and negative
sentiment around ESG.
Simultaneously, the rapid advancement of AI is reshaping
our ways of working – and our industry. Public awareness
around AI reached a tipping point in 2024. It transformed
our engagement with clients and, as the recognised leaders
in AI, our positioning in the industry. In just one short
year, the brand marketing organisation has become more
complex, making previous playbooks obsolete. Brands now
need real-time engagement and connections moving at the
speed of culture.
That’s where we come in. We help our clients implement
AI in their supply chains to drive consolidation and
unlock significant cost savings, productivity gains and
innovation. And while the industry is adapting to the rapidly
changing talent landscape, we will focus on our talented
people – providing ongoing training, immersing them
in AI technology and related tools, and enhancing their
understanding of governance aspects related to associated
risks, data privacy, security and the appropriate code
of conduct.
Our work over the past few years – and particularly in 2024
– has set our benchmark for the future, with clarity (and,
of course, room for improvement) on where we can amplify
positive impact. With this level of change there is always
something to look forward to.
Our sustainability commitments
S4Capital plc Annual Report and Accounts 2024
26
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Our sustainability commitments continued
Our ESG strategy continues to focus on our pillars of
People Fulfilment, Our Responsibility to the World and
One Brand.
People Fulfilment
We are committed to building a globally decentralised
workforce that embraces diverse perspectives,
skills, thoughts and experiences. We provide our people
with the tools, training and support needed to foster a
culture that allows us to adapt to the changing world.
Our Responsibility to the World
Our overarching sustainability goal is our commitment to
SBTi-approved Greenhouse Gas (GHG) targets, with 2022
as the baseline year for market-based reporting.
In addition to our net zero targets, we are committed to
steadily increasing our renewable energy consumption,
aiming for 100% renewable energy by 2040. Furthermore,
we have set an ambitious goal to transition to a fully
electric vehicle fleet by 2030, reinforcing our dedication to
sustainable operations and carbon reduction. We also aim
to report against the global legal reporting requirements
and frameworks, which will lead to new internal governance
structures, KPIs and processes. In 2024, we implemented
a range of additional internal policies to strengthen ethical
conduct, enhance information security, and improve overall
governance standards across our operations.
We will continue to comply with our client requests to
submit our data to CDP, EcoVadis and UniTier, aiming to
better our score year on year as a result of improved
ESG performance through our people, planet and
governance programmes.
Overall net zero target
Reach net zero GHG emissions across the value chain by
2040
Near-term targets
Reduce absolute Scope 1
and 2 GHG emissions
Reduce absolute Scope 3
GHG emissions
42%
25%
by 2030 from a 2022
base year1
during the same
timeframe
Long term targets
Reduce absolute Scope 1, 2 and 3 GHG emissions
90%
by 2040 from a 2022 base year
Note:
1. Reduction of near-term target increases by 4.2% each year from
2028 onwards, with an implied reduction in Scope 1 and 2 of
42% by 2030.
Our journey to date
FY21
• First advertising and
marketing firm to
commit to the Amazon
Climate Pledge, with
the aim of net zero
emissions by 2040
FY22
• Inaugural CDP
response, scoring B-
• First Task Force
on Climate-
Related Financial
Disclosures (TCFD)
risk assessment
and disclosures
• Submitted SBTi letter
of commitment
FY23
• Implementation of
GHG software to
develop data quality
and analysis for GHG
• Set formal SBTi
targets and
began work on
Transition Plan
• CDP score of B
FY24
• Global B
Corp Certification
• Received validation of
SBTi target
• ESG SteerCo
established
• TCFD risk assessment
with advanced
physical risk modelling
• Double Materiality
Assessment
undertaken
While our focus on AI and related technologies highlight
new sustainability challenges, it also opens up exciting
opportunities for innovation. This technology fosters
innovation and enhances our ongoing work with and for our
clients, some of whose projects can indirectly contribute to
the United Nations Sustainable Development Goals (SDGs).
We also participate in industry initiatives like
#ChangeTheFace and AdGreen, and our team will continue
to share their insights and engage with our stakeholders on
creativity, technology and the industry moving forward on
global events and media.
One Brand
All these initiatives contribute to a more integrated
approach with ESG as part of our business model,
unifying our operating model and strengthening our One
Brand execution moving forward under a single P&L.
S4Capital plc Annual Report and Accounts 2024
27
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Our impact model
People Fulfilment
Our Responsibility to the World
One Brand
People
7,166 Monks
48.6% women
47.7% men
3.7% undeclared
Resources
48 offices
33 countries
3,911,480 KWh electricity used
Our relationships
Clients
Technology partners
Investors
Input
We empower our people to be a
catalyst for change, in an inclusive,
diverse and creative workplace
We embed integrated sustainable
processes to drive efficiency and
long-term environmental responsibility
across all facets of our business,
ensuring progress toward net
zero operations
We remain economically viable and
invest in our innovations enabling us to
contribute to sustainability challenges
in the long run
We help improve the ESG impact
of our clients – to bring about the
shift in attitudes and behaviour
needed to reach the SDGs
Long-term
value
Offered 76 intern and
associate positions
Continued flagship S4 programmes
Deployed Accelerate.Monks
management programme, over 800
applicants globally
21.2% absolute emissions (market-
based) reduction YoY
2.8 tCO2e per employee
42.1% of electricity is renewable
£848.2 million revenue
£78,136 (0.01% of revenue) donated
to charities and 3,184 voluntary hours
6,872 projects
544 For Good projects
113 Purpose-driven clients
Output
S4Capital plc Annual Report and Accounts 2024
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Materiality assessment and outcome
Since 2019, we have embraced voluntary frameworks like
GRI (Global Reporting Initiative) and SASB (Sustainability
Accounting Standards Board), while complying with the
Sustainability Disclosure Requirements (SDR) mandated by
the Financial Conduct Authority (FCA) in the UK. That year
we conducted our first materiality assessment, asking our
stakeholders: “What should we consider as material when it
comes to our people and planet?”
Over the years, this comprehensive analysis has not only
involved examining our internal expectations and key
sustainability strengths, but has also required us to view
our business through the lens of crucial stakeholders:
our people, investors, clients, suppliers and partners.
We have committed to updating our materiality matrix
annually, based on what our stakeholders deem material,
as we have done in previous years.
In the future, in accordance with prevailing legislation
and the proposed changes via the Omnibus package,
we fall within the scope of the Corporate Sustainability
Reporting Directive (CSRD). In preparation for this Directive,
the Group conducted a Double Materiality Assessment
(DMA) in 2024. The assessment followed guidance from
the European Sustainability Reporting Standards (ESRS),
based on relevant financial thresholds, which involved
an analysis of the risks and opportunities affecting our
business and the impacts of our business on stakeholders.
The results of our DMA confirmed that the previously
identified material topics mostly remain relevant to
the Group.
Zero impact workspaces
Sustainable work
People fulfilment
Responsibility to the world: Governance
1
Climate change
2
Working conditions:Mental health & wellbeing
3
Talent development & training
4
Impact work
5
Diversity, equity & inclusion
6
Ethics & responsible business practices
7
Sustainable sourcing
8
Privacy & data protection
9
Sustainable innovation & technology
10 Responsible marketing practices
Our 2024 materiality assessment reflects a strategic shift
in stakeholder priorities, emphasising Climate change
(new number one material topic), Ethics & responsible
business practices, and Mental health & wellbeing.
Climate change, and specifically our net zero commitment,
have become central themes, underscoring the growing
urgency for sustainability matters and emissions reduction.
Additionally, Mental health & wellbeing, and Ethics &
responsible business practices have gained prominence,
reinforcing our commitment to fostering a people-
first culture.
The inclusion of Responsible marketing practices and
Sustainable sourcing highlights increasing expectations
for transparency, accountability and impact-driven business
solutions. As we move forward, we remain committed
to aligning our strategy with these evolving priorities,
ensuring long-term value for our stakeholders and the
communities we serve.
8
10 9
Important for external stakeholders
Critical
Insignificant
Important for Monks
Critical
High impact
Compliance
Low impact
4
5
3
2
6
7
1
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Financial statements
Our Responsibility to the World: Zero impact workspaces
Zero impact
workspaces
Our emission reduction strategy prioritises actions that
result in energy efficiency, utilising renewable electricity,
and minimising our dependence on fossil fuels across our
global operations. Following the approval of our Science-
Based Targets by the SBTi in 2024, we have made
significant progress towards achieving our long-term goal
of net zero by 2040. Compared to 2023, we achieved
a 21.2% reduction in our total greenhouse gas (GHG)
emissions (market-based).
Results
Scope 1 emissions decreased significantly by 53.2%
across all categories
In 2024, we closed offices known for high gas consumption
and refrigerant leaks, and consolidated offices into
energy-efficient locations. Notably, our reliance on gas has
decreased by 55.3%, while the number of electric vehicles
in our fleet has grown to 80% in 2024, contributing to
a 60% reduction in mobile combustion emissions from
leased company cars.
The availability of electric charging stations at our facilities
in the Netherlands and Germany reduced our reliance on
fuel for our hybrid fleet.
Scope 2 emissions (market-based) increased slightly
by 6.5% year over year
While the percentage of offices utilising renewable energy
remains relatively stable, our overall electricity consumption
rose, leading to a decrease of 290 basis points in renewable
energy as a percentage of our total energy consumption
compared to 2023. Facility consolidation is key to our carbon
reduction action plan and, as noted above, we consolidated
certain locations in 2024. The emissions from the facilities
we have consolidated are included in our Scope 2 emissions
(market-based), however, the full year benefit of the
consolidation will show in 2025.
Usage of district heating increased by 2.2%. Two of our
European offices rely on district heating, although one
was closed in 2024, and an action plan to implement more
energy-efficient methods for the remaining facility is in
development. With the ongoing optimisation of our global
facilities, we anticipate a reduction in Scope 2 emissions in
the years ahead. Since we do not own our facilities, we aim
to switch to renewable energy contracts whenever possible.
We are actively exploring ways to make these types of
switches for both facilities and leased vehicles.
Methodology, collection of data and reporting
Our methodology for GHG emissions reporting has
remained consistent. We continue to follow guidance
provided by the GHG Protocol Corporate Accounting and
Reporting Standard and the Environmental Reporting
Guidelines, including the Streamlined Energy and Carbon
Reporting (SECR) regulations established by the UK in
March 2019 (with updates to the Introduction and Chapters
1, 2). We measure carbon intensity per employee to assess
our environmental impact relative to workforce size.
Utility consumption data is collected for all operational
facilities, including those only partially active during the
reporting year. GHG emissions from electricity consumption
are calculated using both the market-based and location-
based methods to provide a comprehensive look at our
electricity-related emissions and their impact on our
sustainability goals.
Emission factors are sourced from the 2024 International
Energy Agency (IEA) dataset and the UK’s DEFRA 2024
emission factor for generation, transmission, and distribution.
To enhance data accuracy and efficiency, we have integrated
environmental management software into our GHG reporting
framework. Notably, suppliers are providing us with more
actual emissions data, particularly regarding business travel,
which significantly improves the overall quality of our data.
Obtaining actual data from co-working facilities has posed
a challenge, and we have had to employ extrapolation
methods to estimate emissions where actual data is
unavailable. We were able to obtain 100% actual data
for our UK offices.
Our reporting of Scope 3 GHG emissions is consistent
with the GHG Protocol Corporate Value Chain (Scope 3)
Accounting and Reporting Standard, where we identified
six material categories to report on.
Progress against targets
Scope 1
Scope 2
Scope 3
Scope
1, 2 & 3
Renewable
electricity
0
20
40
60
80
100
42%
(2030)
7.3%
64.2%
42%
(2030)
90%
(2040)
100%
(2040)
42.1%
37.2%
Achieved 2022–2024
Target
34.9%
25%
(2030)
S4Capital plc Annual Report and Accounts 2024
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Financial statements
Our Responsibility to the World: Zero impact workspaces continued
From (hydroponic) farm
to table in Singapore
At Monks Singapore, the organic hydroponic
vegetable wall farm isn’t just a piece of decor
– it’s a living, breathing symbol of sustainability
and wellbeing. Every week, Monks harvest fresh,
nutrient-rich vegetables and herbs such as kale,
lettuce and mint grown right in the office for our
team to take home. Whether it’s for a crisp salad,
a revitalising juice or a home-cooked meal, this wall
nourishes more than just bodies – it cultivates a
culture of health and conscious living.
Going green
in Noida
Given the high levels of pesticides and chemicals
in most market produce today, our team in Noida,
India, wanted to provide their fellow Monks with a
healthier alternative. Cultivated in small dirt patches
surrounding our office building – and now making
up almost 50% of our entire office area – the Monks
Farm produces organic and seasonal vegetables for
our Monks to enjoy at the office or at home. To lean
into sustainability (and because municipal water is not
always sufficient), we also harvest rainwater.
50%
of our Noida office area is made up by Monks Farm
Scope 3 emissions decreased substantially by 18.3%
in 2024 compared to 2023
After conducting an internal assessment, we determined
that our Scope 3 emissions profile – the number of
categories we report on – remained the same year over year,
with six material categories emerging out of a total of 15.
The reductions were observed across all disclosed items,
except for waste generated in our operations. Most cities
in the APAC and LATAM regions lack available data on
operational waste generation, complicating the accuracy
of sustainability reporting. To address this, our facility teams
globally employ a manual tracking method, estimating
monthly waste based on bag sizes and disposal frequency.
This year, we streamlined this process, resulting in improved
global waste estimations.
The decrease in our Scope 3 emissions can be attributed
to several key factors. A number of our suppliers now
provide actual emissions data, particularly around business
travel, which has improved the quality of our Scope 3 data.
We also saw lower emissions numbers in purchase of goods
and services, which is broadly directly correlated with the
underlying costs of these activities. This was as a result
of the discipline on controlling our overall cost base and is
expected to continue. The breakdown of our hosting usage
revealed a reduction of 34.8%, reflecting our commitment
to creating greener digital products. While measuring
all digital-related activities across our operations is
challenging, our incremental improvements and disciplines
have enabled us to help clients achieve better outcomes
with less cost to the earth. Our refined travel policy
has provided better insights into team travel activities,
fostering more efficient travel practices and additional
emissions reductions. A decrease in headcount has also
contributed to lower emissions, reflected in a reduction
in employee commuting and travel.
These collective efforts underscore our commitment to
sustainability and continuous improvement as we work
towards our net zero 2040 goal.
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Our Responsibility to the World: Zero impact workspaces continued
2024 tCO2e emissions per scope
Total Scope 1
1,293
Total Scope 2 (market-based)
1,005
Total Scope 3
17,923
2024 tCO2e emissions by category
Natural gas
168
Company leased cars
18
Refrigerant leakages
1,107
District heating & steam
25
Electricity – Grey (market-based)
980
Purchases of goods & services
10,918
Capital goods
1,117
Fuel & energy related activities
299
Waste generated in operations
139
Business travel (land & air)
4,733
Employee commuting
717
2023 tCO2e emissions by category
Natural gas
376
Company leased cars
45
Refrigerant leakages
2,343
District heating & steam
22
Electricity – Grey (market-based)
922
Purchases of goods & services
13,987
Capital goods
1,359
Fuel & energy related activities
567
Waste generated in operations
93
Business travel (land & air)
5,169
Employee commuting
771
2023 tCO2e emissions per scope
Total Scope 1
2,764
Total Scope 2 (market-based)
944
Total Scope 3
21,946
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Financial statements
Our Responsibility to the World: Zero impact workspaces continued
Emissions profile: Global and UK, 2024 vs 2023
Global 2024
Global 2023
Global % change
2024/2023
UK 2024
UK 2023
UK % change
2024/2023
Employees
7,166
7,707
(7.0%)
304
312
(2.6%)
Total tCO2e (market-based)
20,221
25,654
(21.2%)
1,235
1,856
(33.4%)
Carbon intensity tCO2e per employee
2.8
3.3
(15.2%)
4.1
5.9
(31.7%)
Streamlined energy and carbon reporting: Global and UK operations, 2024 vs 2023
Global gas
consumption 2024
Global gas
consumption 2023
Global gas
consumption %
change 2024/2023
UK gas
consumption 2024
UK gas
consumption 2023
UK gas
consumption %
change 2024/2023
kWh
916,143
2,037,888
(55.0%)
13,043
1,359,285
(99.0%)
kgCO2e
167,855
375,720
(55.3%)
2,390
251,887
(99.1%)
kWh/Employee
128
264
(51.6%)
43
4,357
(99.0%)
kgCO2e/Employee
23
49
(52.2%)
8
807
(99.0%)
Global electricity
consumption 2024
Global electricity
consumption 2023
Global electricity
consumption %
change 2024/2023
UK electricity
consumption 2024
UK electricity
consumption 2023
UK electricity
consumption %
change 2024/2023
kWh
3,911,480
4,476,841
(12.6%)
24,444
459,108
(94.7%)
kgCO2e
980,029
922,035
6.3%
1,934
2,752
(29.7%)
kWh/Employee
546
581
(6.1%)
80
1,472
(94.5%)
kgCO2e/Employee
137
120
14.0%
6
9
(29.3%)
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Financial statements
Our Responsibility to the World: Zero impact workspaces continued
Greenhouse gas emissions breakdown by scope: Global and UK, 2024 vs 2023
Global tCO2e
2024
Global % of
Total 2024
KgCO2e/
Employee 2024
Global tCO2e
2023
Global
% change
2024/2023
UK tCO2e
2024
UK tCO2e
2023
UK
% change
2024/2023
Scope 1
Natural gas – stationary combustion
168
0.8%
23
376
(55.3%)
2
252
(99.0%)
Company leased cars – mobile combustion
18
0.1%
3
45
(60.0%)
–
–
–
Refrigerant leakages – fugitive emissions
1,107
5.5%
154
2,343
(52.8%)
142
449
(68.4%)
Total Scope 1
1,293
6.4%
180
2,764
(53.2%)
144
701
(79.4%)
Scope 2
Purchased heat and steam 1
25
0.1%
3
22
13.6%
–
–
–
Purchased electricity – Grey (market-based)
980
4.8%
137
922
6.3%
2
3
(33.3%)
Purchased electricity – Grey (location-based)
1,295
6.3%
181
1,538
(15.8%)
5
95
(94.7%)
Purchased electricity – Green – as a percentage of total consumption
42.1%
–
–
45.0%
(290 bps)
79.6%
97.0%
(1,740 bps)
Total Scope 2 (market-based)
1,005
5.0%
140
944
6.5%
2
3
(33.3%)
Total Scope 2 (location-based)
1,320
6.4%
184
1,560
(15.4%)
5
95
(94.7%)
Total Scope 1 & 2 (market-based)
2,298
11.4%
321
3,708
(38.0%)
146
704
(79.2%)
Total Scope 1 & 2 (location-based)
2,613
12.7%
365
4,324
(39.6%)
149
796
(81.2%)
Scope 3
Purchased goods and services 1
10,918
54.0%
1,524
13,987
(21.9%)
463
567
(18.3%)
Capital goods
1,117
5.5%
156
1,359
(17.8%)
47
55
(14.5%)
Fuel- and energy-related activities
299
1.5%
42
567
(47.3%)
1
43
(97.7%)
Waste generated in operations
139
0.7%
19
93
49.5%
3
7
(57.1%)
Business travel (land and air)
4,733
23.4%
660
5,169
(8.4%)
549
453
21.2%
Employee commuting
717
3.5%
100
771
(7.0%)
26
27
(3.7%)
Total Scope 3
17,923
88.6%
2,501
21,946
(18.3%)
1,089
1,152
(5.5%)
Total GHG emissions (market-based)
20,221
100.0%
2,822
25,654
(21.2%)
1,235
1,856
(33.4%)
Total GHG emissions (location-based)
20,536
100.0%
2,866
26,270
(21.8%)
1,238
1,948
(36.4%)
Note:
1. Purchased goods and services includes water usage. Global tCO2e for water in 2024 is 4 (2023: 10) and UK tCO2e for water in 2024 is 0.02 (2023: 1).
A significant reduction in Scope 1 and 2 emissions was achieved in the UK, mainly due to our move from the old London office to a new, smaller location that uses less natural gas,
electricity and has fewer refrigerant leakages. However, the new facility still partially depends on non-renewable energy sources, which has lowered our percentage of renewable energy
usage in relation to our total consumption.
S4Capital plc Annual Report and Accounts 2024
34
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Sustainable work
Our Responsibility to the World: Sustainable work
The year was marked by both challenges and successes,
prompting us to reassess our business models and
overall impact. As we navigated the evolving landscape
of our industry, we remained disciplined and proactive
in driving efficiency across the Group. Our talented
teams demonstrated agility, adapting in real time to
emerging challenges.
AI emerged as a key strategic focus, leading us to invest
in training and resources that help clients and partners
enhance efficiency through sustainable solutions.
Internally, we advanced our transformation by implementing
the ‘One Brand’ strategy, including an integrated Go-
To-Market approach, fostering a unified culture that
strengthens our collective identity and impact.
The total number of projects has declined for three
consecutive years, influenced both by our integrated
Go-To-Market strategy and broader economic factors.
However, the percentage revenue from For Good projects
has increased to 4.5% from 4.2%. In contrast, revenue
from Purpose-driven clients has decreased to 2.9% from
3.3%. Despite an 8.4% increase in the number of For
Good projects, total revenue did not grow proportionally
due to a decline in revenue per project. We successfully
expanded our Purpose-driven client base by 11.9%, with a
notable concentration of these clients in the APAC region.
The Group has continued to make donations to make an
impact to causes it supports, and these have increased
by 20.5%. The hours donated to community and charity
services have also significantly increased by 119.7%.
As climate change contributes to a growing number of
catastrophes globally, we are committed to reducing
greenhouse gas emissions and achieving net zero by 2040,
while also supporting relief efforts through contributions.
Our performance, 2024 vs 2023
2024
2023
% change
2024/2023
Total number of projects
6,872
8,414
(18.3%)
Total For Good projects
544
502
8.4%
Revenue from For Good projects
£38,581,276
£42,407,192
(9.0%)
% revenue from For Good projects/revenue
4.5%
4.2%
30 bps
Purpose-driven clients
113
101
11.9%
For Good projects for Purpose-driven clients
395
409
(3.4%)
Revenue from Purpose-driven clients
£24,362,663
£33,249,745
(26.7%)
% Revenue from Purpose-driven clients/revenue
2.9%
3.3%
(40 bps)
% Revenue from projects for alcohol and tobacco clients 1
2.8%
2.6%
20 bps
Monetary donations to community and charity services
£78,136
(0.01% of revenue)
£64,870
(0.01% of revenue)
20.5%
Hours donated to community and charity services
3,184
1,449
119.7%
Note:
1. The Group does not have any revenue from tobacco clients (2023: nil).
S4Capital plc Annual Report and Accounts 2024
35
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Our Responsibility to the World: Sustainable work continued
“The role of AI in our industry is
truly transformational, and it is quite
different. Normally in our business
you
see something new, which is
overhyped,
and you then have to get through
a massive gap to catch up. This is
the first time I’ve seen where the
technology – AI – is ahead of what
people think it can do. The challenge
is the ability for teams, talents
and the enterprise to ingest the
technology and use it effectively”
Wesley ter Haar
Chief AI and Revenue Officer
Leveraging AI as a force for good
Our clients trust us as leaders in AI, relying on our expertise
to navigate this transformative technology responsibly.
With that trust comes the responsibility to uphold the
highest standards. Below are some of the key ways we
ensure AI is harnessed as a force for good, reinforcing
our commitment to ethical and responsible innovation.
Ensuring responsible use of AI
With AI playing a growing role in our day-to-day work,
ensuring AI is used responsibly throughout our organisation
is critical. To that end, in 2024 our AI Training Taskforce
launched AI Maker Trainings for our ‘Maker’ Monks — those
who contribute to and deliver innovative solutions for our
projects and clients. These trainings equip our teams with
the skills and knowledge needed to harness AI effectively
and responsibly.
Additionally, we introduced 15 Minutes of Now, a series
of weekly training sessions designed to keep our people
at the forefront of AI developments. These sessions are
tailored across business and operations, creative and
tech, ensuring that all teams, regardless of their function,
stay ahead in AI-driven technology advancements and
continuously enhance their expertise. These mandatory
trainings cater to different levels of proficiency and provide
our people a base level of knowledge about AI holistically.
Our AI Core team handles all things related to legal,
tooling, and hardware. Their mission is to help Monks use
AI tools responsibly, protect the interests of Monks and
our clients, and foster innovation within the Group. AI Core
consists of representatives from our Legal, Data Privacy
and Information Security teams.
Mitigating bias in AI
As AI becomes integral to marketing and content creation,
it’s essential to acknowledge the risks it poses, particularly in
perpetuating biases. Left unchecked, AI systems can reflect
and amplify the same prejudices that society struggles with,
undermining efforts toward fairness, diversity and inclusion.
At our core, we believe AI should not just avoid harm – it
should actively promote equity, challenge entrenched biases
and contribute to a more inclusive world. That is why we
have committed ourselves to rigorous data management,
robust oversight and purposeful design to ensure AI
systems prioritise ethical outcomes. By taking an active
role in shaping how AI systems are trained and deployed –
whether by rethinking prompt design, scrutinising datasets,
or incorporating diverse voices into the AI development
process – we are doing our part to ensure that they are tools
for inclusion.
Promoting more sustainable use of AI
As AI adoption accelerates, its energy consumption and
environmental impact have become pressing concerns.
Training and operating AI models requires immense
computational power, creating a growing demand for
energy-intensive GPUs. While this presents challenges,
it also provides an opportunity to rethink how AI can be
integrated as part of the solution for achieving climate
sustainability. That is why we are committed to partnering
with experts, such as cloud engineers and AI leaders,
to explore innovations that minimise energy consumption
while maximising global impact.
S4Capital plc Annual Report and Accounts 2024
36
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Changing the way work is done
As part of our foundational environmental, social and
governance goals, we aim to become a catalyst for
change in our industry. Leading by example, we are
constantly ideating, innovating and creating solutions to
drive efficiency, further the development of sustainable
options and transform how the work is done – for the better.
Below are just some of our 2024 innovation highlights.
Monks.Flow: Transforming organisational workflows
Early in 2024, we unveiled our award-winning Monks.
Flow, an application ecosystem that is transforming
organisational workflows by integrating human talent
with AI technology. The service weaves together numerous
workflows designed for developing insights, building assets
at scale, adapting content, measuring performance and
optimisation, and more. At Monks, we are changing the
way work is done. But we are not doing it alone. We have
teamed up with industry leaders – including Adobe,
Meta, Google, Nvidia, and others – to advance end-to-end
content supply chains, cut costs and deliver on the promise
of personalisation at scale. These partnerships help keep
our clients ahead of the market while steering the industry
toward a new pricing model based on output rather
than time.
Our Responsibility to the World: Sustainable work continued
Monks: Redefining outdated pricing models
We have redefined the agency commercial model to match
AI-driven content creation. Traditional time-and-materials
billing doesn’t work in an era where AI accelerates outputs.
Our outcome-based pricing model focuses on results,
delivering faster, smarter and more cost-efficient solutions.
This shift incentivises innovation and challenges outdated
industry norms.
Formula AI: Delivering efficient
and sustainable solutions
More and more of our clients are seeking AI solutions
that are efficient, reliable and sustainable. Formula AI
directly addresses these needs by combining smaller
language models with knowledge graphs, significantly
reducing computational power needs and carbon footprint
compared to massive models. Formula AI also ensures
accuracy by grounding AI responses in verifiable data,
allowing organisations to confidently deploy AI solutions
while maintaining compliance and reducing their exposure
to risks from AI-generated misinformation.
OpenPlay Signature: Streamlining music catalogue
and rights management
The result of a strategic partnership between Monks
and OpenPlay, OpenPlay Signature marks a significant
advancement in music and media management, offering
clients a customisable platform that aligns precisely with
their business needs to enhance efficiency in catalogue
and rights management. This partnership allows for
rapid deployment of customised solutions, reducing
implementation times from years to months.
Private Network Common Platform (PNCP):
Revolutionising mission-critical live media
Built in collaboration with Verizon and NVIDIA, PNCP
redefines live streaming for mission-critical applications.
Unlike traditional systems that rely on public networks,
Verizon’s Private 5G delivers dedicated, interference-free
bandwidth, ensuring seamless, high-quality streaming in
environments where reliability is paramount. From disaster
zones to dense urban events, this platform guarantees
uninterrupted performance, even in high-demand situations
where public networks are prone to failure.
Monks and AWS: The future of broadcasting
By innovating the traditional broadcast model through our
cloud-based Virtualized Broadcast workflows, the cost
savings are not just in dollars, but in carbon emissions.
With our partner AWS, we were able to reduce our footprint
to 0.1 metric tons of CO2e over a seven-game span for
our ‘virtual broadcast truck’ during the NBA in VR season.
At a 75% reduced carbon footprint, we present a more
sustainable model for live event production.
S4Capital plc Annual Report and Accounts 2024
37
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Our Responsibility to the World: Sustainable work continued
Hatch: The Impossible Ad
Google invited us to participate in their Creative
Lighthouse programme, challenging partners to
make an ‘impossible ad’ with their Gemini LLM.
We launched a comprehensive campaign for
Hatch, in which we aimed to balance consumer
education with performance, while achieving deep
personalisation at scale. Monks.Flow worked
seamlessly with Gemini to enhance creative ideation,
strategy and consumer persona development, and
with Google Performance Max to generate layouts
specifically for their campaigns. We generated
multiple headlines and locations – from bedrooms
to boardrooms, yoga studios to mountaintops – to
create targeted ads in just hours resulting in a 50%
reduction in hours and 97% reduction in costs
versus legacy approaches, freeing up massive
resources for creatives and marketers to focus
on areas where human touch is more critical.
Victimes & Citoyens: Drive Like A Woman
To stay alive, and to save lives, men need to adopt a driving style often attributed
to women. This crucial message was effectively communicated through an
innovative OOH campaign. Simultaneously, on social platform X, we developed
a chatbot specifically designed to respond to every tweet concerning women’s
driving. The chatbot provided well-reasoned and indisputable arguments that
sparked a significant societal discussion across France. Remarkably, this initiative
resonated far beyond borders, reaching audiences on all five continents and
igniting conversations about gender and driving safety that are both relevant
and transformative.
Sir Martian: Our Chatty AI Artist
With AI, we are exploring new kinds of creative
experiences that could not have been possible
before. Case in point: our ‘alien’ robot Sir Martian.
Capable of not only holding a conversation with
users but also sketching portraits of them using
cutting-edge generative AI in language, voice and
vision technologies as a palette, this expressive
robot captures the user’s likeness – and essence – to
create bespoke portraits. Sir Martian was recognised
by Ad Age as one of the Top 5 AI Marketing
Activations to Know About.
S4Capital plc Annual Report and Accounts 2024
38
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
People Fulfilment
In 2024, Monks adopted the theme of democratising
culture, empowering our global teams to shape their own
cultural narratives while anchoring them in shared values.
This strategy not only fosters inclusivity and flexibility but
has also driven a positive shift in our representation across
all levels of the organisation.
We saw the proportion of women in management
positions increase by 5.2%, now making up 46.6% of
the management workforce, up from 44.3% in 2023.
Additionally, the proportion of women in other professional
positions has continued to grow, reaching 52.3% in 2024,
up from 48.9% in 2023, further demonstrating our focus
on gender balance across the organisation. Composition of
the S4Capital Board of Directors has changed year over
year as well, with women making up 44.4% of the Board
versus 33.3% in 2023 (see page 41).
Programmes like the S4 Fellowship continue to drive
forward our recruitment efforts, expanding outreach to
Minority-Serving Institutions (MSIs) and ultimately helping
to shape a leadership pipeline that mirrors the diversity of
the global landscape. This year, these initiatives helped
produce a 145% increase in applications, underscoring
the appeal of a programme rooted in both diversity and
career development.
As we continue to refine and expand our diversity initiatives,
we remain dedicated to building a culture that is not only
global and diverse, but also truly inclusive, where every
Monk contributes to co-creating a rich, dynamic
cultural experience.
“After receiving numerous awards
for our work in AI – including Adweek’s
inaugural AI Agency of the Year and
Business Intelligence Group’s Excellence
in Artificial Intelligence – Monks continues
to be a workforce deeply rooted in
shaking the foundations of our industry,
embodying this spirit through our ESG,
talent and culture efforts. Our people
continue to show up for each other, even
as we face headwinds across the global
economy, climate and governments”
James Kinney
Global Chief People Officer
Our people progress, 2024 vs 2023
Total 2024
Women
2024
Men 2024
Undeclared
2024
Total 2023
Women
2023
Men 2023
Undeclared
2023
Employees
7,166
48.6%
47.7%
3.7%
7,707
47.6%
49.7%
2.7%
Part time
1.7%
2.0%
Full time
98.3%
98.0%
Permanent contract
95.2%
96.0%
Temporary contract
4.8%
4.0%
% of turnover per total
employees by gender
28.3%
46.6%
47.3%
6.1%
36.0%
47.0%
50.0%
3.0%
Covered by collective bargain
agreement
30.3%
27.0%
Absenteeism in the Netherlands
3.5%
3.0%
S4Capital plc Annual Report and Accounts 2024
39
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
People Fulfilment continued
Gender balance of workforce 2024
Women
48.6%
Men
47.7%
Undeclared
3.7%
Our representation
In line with our competitor sets and client needs over the
past several years, we have structured ourselves for now
and the future, ultimately consolidating 34 companies
into one operating brand. Streamlining has enhanced our
operational efficiency and positions us more competitively
in the market, reflecting our adaptability and foresight.
This operational transformation resulted in a 7.0%
decrease in overall headcount in 2024 compared to 2023.
Despite these changes, our unwavering commitment
to empowering women in the workforce allowed us to
maintain a healthy gender balance, a point of pride for
our organisation.
This year we attained 48.6% female representation,
which is our highest to date. We were pleased to bring
on board exceptional talent such as Linda Cronin, EVP of
Global Media; Nikki Gifford, Chief Operating Officer
of Technology Services; and Juanita Draude, EVP of
EMEA. While we have achieved our highest percentages
of women in other professional positions at 52.3%
and in management at 46.6%, we did observe a 1.4%
decline in women in executive roles. To address this,
we expanded our S4 Women in Leadership Program to
support those emerging into leadership, providing training
and opportunities to equip them for advancement.
Gender balance of workforce by role 2024
Executive
Men
2024
2023
Women
Undeclared
60.6%
59.6%
36.9%
38.3%
2.5%
2.1%
2.5%
1.5%
50.9%
54.2%
Management
Men
Women
Undeclared
46.6%
44.3%
43.4%
48.6%
52.3%
48.9%
4.3%
2.5%
Other positions
Men
Women
Undeclared
19.7%
33.0%
36.8%
46.8%
43.5%
20.2%
Internship
Men
Women
Undeclared
S4Capital plc Annual Report and Accounts 2024
40
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
People Fulfilment continued
Overall US ethnicity, 2024
Native American
or First Nations
0.1%
Asian
14.2%
Black or African
American
5.2%
I do not wish
to answer
7.2%
Native Hawaiian or
Other Pacific Islander
0.4%
Hispanic or Latino
9.2%
Two or More Races
6.6%
White
57.1%
Our US workforce demographics reveal a complex
landscape of representation.
Asian representation decreased slightly to 14.2%,
while Black or African American employees made up 5.2%,
and Hispanic or Latino representation was at 9.2%. Notably,
the percentage of individuals identifying as Two or More
Races increased to 6.6%. At the Executive level, we saw
an increase in Black or African American representation
to 2.3% and Hispanic or Latino representation at 6.2%.
Professional roles have seen positive diversity trends in
the US, with Black or African American representation
increasing to 9.2% and Hispanic or Latino representation
rising to 14.2%.
In addition to this, all five of our S4 Fellows from the 2022
cohort successfully completed the rotational programme
that focused on building a robust skillset within various
facets of our business. We are delighted that they chose to
stay at Monks, finding full time employment roles in different
areas of our business that met their unique interests and
career aspirations.
Table on gender or sex and ethnicity representation in the Board and executive management, FCA
The Financial Conduct Authority (FCA) requires us to have a structure approach to monitoring gender diversity and ethnicity
Number of Board
members
% of the Board
Number of senior positions
on the Board (CEO, CFO, SID
and Chair)
Number in executive
management
Percentage of
executive management
Reporting on gender identity or sex
Men
5
55.6%
5
6
75.0%
Women
4
44.4%
4
2
25.0%
Other categories
—
—
—
—
—
Not specified/prefer not to say
—
—
—
—
—
Reporting on ethnic background
White British or other White (including minority White groups)
7
77.8%
—
3
37.5%
Mixed/Multiple ethnic groups
—
—
—
—
—
Asian/Asian British
1
11.1%
—
—
—
Black/African/Caribbean/Black British
—
—
—
1
12.5%
Other ethnic group, including Arab
—
—
—
1
12.5%
Not specified/prefer not to say
1
11.1%
—
3
37.5%
In alignment with our commitment to engage, empower and lift women all across our organisation, composition of the S4Capital Board of Directors shifted this year, with women making
up 44.4% of the Board versus 33.3% in 2023. Moving forward, our focus will be on ensuring our programmes and practices continue to provide equitable and accessible opportunities to
foster a diverse and dynamic workforce.
S4Capital plc Annual Report and Accounts 2024
41
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Recruitment and professional development
S4 Fellowship
The S4 Fellowship Program is a two-year rotational
programme for exceptional graduates, offering immersive
career-building experiences in a phased learning
curriculum. Fellows engage in professional development
and training, cross-functional collaboration, and industry
exposure working alongside executives and managers
in various capacities. All five Fellows in our F2 (2022)
cohort successfully transitioned into permanent roles in
2024, achieving our goal. Initially focused on HBCUs,
the programme expanded in 2024 to include graduates
from other Minority-Serving Institutions (MSIs), with the
2024 recruitment cycle (F4, our fourth cohort) seeing a
145% increase in applications year over year.
S4 Women in Leadership Program
The fourth cohort of the S4 Women in Leadership Program
gathered at the UC Berkeley Haas School of Business in
November 2024. The programme, which is aligned with the
Women’s Empowerment Principles (WEPs), aims to increase
representation of women in management and leadership
positions within the organisation. Women from across the
Group were invited to apply, with 30 participants selected
from a record number of applicants. Participants were
mentored by internal leaders including Founder Sir Martin
Sorrell, Global Chief Client Officer Deborah Heslip, Global
Chief People Officer James Kinney, S4Capital Group Chief
Financial Officer Mary Basterfield, among others, as well as
Haas School instructors and external speakers.
Mentor.Monks
Launched in June 2024, Mentor.Monks was created to
foster the growth and professional development of Monks
by pairing them with leaders from across the organisation.
During the eight-week session, Monk mentors help
mentees accelerate their professional learning curve.
Participants reported significant outcomes, including
expanded professional networks, long-term connections,
enhanced work quality and improved skills. In 2024, over
29% of our senior North American leaders participated.
Due to the programme’s initial success, it has since been
hosted a second time, and will expand globally in 2025.
Accelerate.Monks
Accelerate is a global training and development programme
that fosters individual growth, while honing creative
thinking, AI, communication, change management and
proactive leadership skills. Over 800 Monks applied for
Accelerate 2024: The Symphony of Success, including
entry-level employees seeking foundational skills, seasoned
professionals looking for advanced insights and leaders
aiming to enhance their leadership and management
capabilities. The programme has created a global learning
culture that reflects our commitment to developing talent
and empowering our workforce to be future-ready in today’s
dynamic, fast-changing landscape.
Taking action locally
As we grow as an organisation, one thing that has come
through from our people is the desire to bring things to life
that represent the unique ethos of their respective cities
and regions. Empowering local teams fosters inclusivity and
ensures that our cultural narrative is diverse, reflective and
relevant – even in our constantly evolving world. Below are
just a few of our Monks’ locally driven initiatives.
It Gets Better: North America Pride month
In 2024, Monks community group Pride.Monks hosted
Brian Wenke, Executive Director of Los Angeles-based
non-profit It Gets Better, for a virtual event ‘It Gets
Better: Storytelling for Good’. The nonprofit’s mission is
to uplift, empower and connect LGBTQ+ youth. Wenke’s
presentation explored the journeys of LGBTQ+ youth and
highlighted the transformative power of storytelling in
shaping sexual orientation and gender identity, providing
real-life examples of how brands can authentically connect
with LGBTQ+ youth to foster meaningful engagement and
support. In alignment with our commitment to Pride, we also
made a financial donation to the organisation.
Chicas en Tecnología: Empower to impact
This volunteer-driven initiative created by our Buenos
Aires Monks in partnership with Chicas en Tecnología
(CET) seeks to narrow the gender gap in technology in
Argentina and x America by motivating, training, and
mentoring young women aged 13–23. The programme
curriculum incorporates mentorship, skill building and
immersive experiences, empowering participants with
technical and leadership skills to promote equitable access
to the technology and STEM fields. Alongside partner
organisation Chicas en Tecnología, which contributed
expertise and outreach, over 40 Monks volunteers served
as mentors, facilitators and workshop leads. More than 250
young people have participated in the programme.
Brixton Finishing School: Creative workshop
The award-winning Brixton Finishing School (BFS) exists
to realise the potential of underrepresented talent across
the marketing, advertising and creative industries. For the
third year running, our London.Monks partnered with
BFS to host their summer school students for a creative
workshop, this year focused on ‘the big idea’. Our creative
leaders led a lively workshop, diving deep into the creative
aspects of the advertising industry and sharing insights
on how we generate groundbreaking ideas for big brands.
The students were thoroughly engaged, asking thought-
provoking questions and sharing their own opinions and
ideas which they put into action during the task element
of the workshop. In 2024, over 50 students attended
the workshop.
People Fulfilment continued
S4Capital plc Annual Report and Accounts 2024
42
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Task Force on Climate-Related Financial Disclosures Report
The Group remains committed to addressing our impact on
climate change and continues to take steps to ensure our
resilience against climate-related physical and transition
risks. Accordingly, in 2024 the Group took further strides
in the management of climate change, building on the
foundation laid in our commitments and previous years
of TCFD reporting.
Governance
S4Capital’s governance of climate issues is continually
evolving to proactively manage climate-related risks
and meet our climate targets. In mid-2024 the Group
established an ESG SteerCo, meeting at least quarterly
to ensure progress on our ESG strategy and compliance
based on the direction from the Board’s Audit and Risk
Committee (ARC) and Executive Committee.
Risk management
The Group’s Enterprise Risk Management Framework
(ERMF) allows for consistent evaluation of climate-related
risks and opportunities. Key activities this year included
completing an inaugural Double Materiality Assessment
per CSRD requirements, identifying material impacts, risks
and opportunities (IROs) for our EMEA operations across
various sustainability topics including climate change.
This assessment confirmed that previously identified
climate risks and opportunities remain relevant and
material for the Group.
Strategy
The Board reviewed identified risks, opportunities and
related mitigations. In 2024, the Group enhanced its
analysis of climate-related physical risk exposures using
Munich Re’s Location Risk Intelligence tool. This geospatial
modelling software provided insights into exposure to
various climate hazards across our offices. While overall
risk exposure remains unchanged, new potential hazards
were identified that could disrupt business operations.
Metrics and targets
In July 2024, the Group’s Science-Based Targets were
validated by the SBTi, including goals to:
• Reduce absolute Scope 1 and 2 GHG emissions by 42%
by 2030 from a 2022 base year.
• Reduce absolute Scope 3 GHG emissions by 25% by
2030 from a 2022 base year.
• Reduce absolute Scope 1, 2 and 3 GHG emissions by
90% by 2040 from a 2022 base year.
These targets align with the 1.5ºC ambition of the
Paris Agreement, and progress will be vital for meeting
stakeholder expectations and demonstrating S4Capital’s
sustainability leadership within the industry.
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Strategic Report
Sustainability Statement
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Financial statements
Task Force on Climate-Related Financial Disclosures Report continued
Compliance with UK Listing Rules
The Board has noted the requirement for mandatory
climate-related disclosures arising from the Companies
(Strategic Report) (Climate-related Financial Disclosure)
Regulations 2022, in addition to UK Listing Rules 6.6.6R.
We set out in the adjacent table our compliance with the
climate-related financial disclosures consistent with all the
TCFD recommendations and recommended disclosures,
as detailed in ‘Recommendations of the Task Force
on Climate-related Financial Disclosures’, 2017, with
consideration of the additional guidance in ‘Implementing
the Recommendations of the Task Force on Climate-
related Financial Disclosures’, 2021. For Scope 3 we have
re-examined all the 15 categories to determine the material
categories that we include in our reporting. Each year we
will reassess all categories and decide which ones are
material for our organisation to report on. For 2024 we
continue to report on six out of 15 Scope 3 categories:
Purchased goods & services, Capital goods, Fuel- and
energy-related activities, Waste generated in operations,
Business travel and Employee commuting.
Recommendation
Recommended disclosures
Reference
Governance
Disclose the organisation’s governance
around climate-related risks and opportunities
a) Describe the Board’s oversight of climate-related risks
and opportunities
Page 45
b) Describe management’s role in assessing and managing
climate-related risks and opportunities
Page 45
Strategy
Disclose the actual and potential impacts of
climate-related risks and opportunities on the
organisation’s businesses, strategy and
financial planning where such information
is material
a) Describe the climate-related risks and opportunities
the organisation has identified over the short,
medium and long-term
Pages
48 to 49
b) Describe the impact of climate-related risks and
opportunities on the organisation’s businesses, strategy,
and financial planning
Pages
40 to 49
c) Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related
scenarios, including a 2°C or lower scenario
Pages
46 to 47
Risk management
Disclose how the organisation identifies,
assesses and manages climate-related risks
a) Describe the organisation’s processes for identifying and
assessing climate-related risks
Pages
45 to 47
b) Describe the organisation’s processes for managing
climate-related risks
Pages
45 to 47
c) Describe how processes for identifying, assessing and
managing climate-related risks are integrated into the
organisation’s overall risk management
Pages
45 to 47
Metrics and targets
Disclose the metrics and targets used to
assess and manage relevant climate-related
risks and opportunities where such
information is material
a) Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process
Pages 48
to 50
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas (GHG) emissions, and the related risks
Pages 30 to
35; 48 to 49
c) Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets
Page 50
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Financial statements
Task Force on Climate-Related Financial Disclosures Report continued
Governance
Board level
The S4Capital Board is responsible for assessing how the
Group creates and sustains long-term value, including the
sustainability of its business model and governance
structures. The Board oversees climate change management
and strategic responses, supported by the Audit and
Risk Committee (ARC), the Nomination Committee
and the Remuneration Committee. Remuneration for
executives and eligible employees includes ESG-linked
targets and this ensures that climate change impacts are
integrated into Group strategy, business plans, and risk
management processes.
With input from the Executive Committee, the Board sets
climate change targets and monitors mitigation projects.
Discussions during the year focused on key issues such
as global B Corp Certification, SBTi and compliance
with CSRD.
Mary Basterfield acts as the ESG Sponsor at the Board
level, providing strategic guidance on climate matters.
Miles Young, as a Non-Executive Director, leads climate-
related discussions and presents updates bi-annually,
often with the support of Regina Romeijn, the Global Head
of ESG.
The Board reviews ESG risks periodically as part of its
principal risk assessment and conducts a bi-annual
overview of ESG performance. The Audit and Risk
Committee is responsible for reviewing the Group’s
principal risks, including those related to sustainability
and climate change, and meets at least three times a
year to evaluate these risks.
Executive Committee
The Executive Committee ensures alignment of the Group’s
ESG priorities with overall business strategy, allocating
resources to meet ESG ambitions within financial planning.
The Global Head of ESG provides progress updates to
the Committee at least bi-annually, with urgent matters
addressed as needed. Mary Basterfield holds primary
responsibility for ESG issues within the Group.
Management level
In 2024, the Group established the ESG SteerCo to guide
its ESG strategy and ensure compliance, reporting to the
Audit and Risk Committee. This cross-functional team
meets quarterly and includes key leaders from finance,
operations, people and governance.
The ESG SteerCo and ARC receive briefings from the
ESG Core team, which focuses on identifying risks and
opportunities while establishing frameworks for data
management. Chaired by Regina Romeijn (Global Head of
ESG), the team includes the Group Reporting Manager,
Group ESG Reporting Lead, and ESG Project Manager.
To support compliance with global ESG frameworks,
the financial control team collaborates with data owners
to document processes and ensure data accuracy.
All business units must incorporate ESG risks into their risk
management as part of the Enterprise Risk Management
Framework (ERMF).
Risk management
Identification of climate-related risks and opportunities is
integrated into S4Capital’s risk management processes,
and climate-related risks have been classified as per
S4Capital’s ERM framework, to ensure comparability of
climate-related risks’ relative significance in relation to
other risks. Our climate risk assessment takes into account
all existing and emerging risks and opportunities, and all
risk categories outlined in the TCFD recommendations.
Risks and opportunities were considered in all physical
and transition risk categories, current and emerging,
and whether they occur within the Group’s own operations
or upstream and downstream of the Group. While all
categories were considered, not all risk categories were
applicable or material to the business. A summary of the
risks and opportunities identified in this assessment can
be found on pages 48 to 49 of this Annual Report.
Climate risks are identified both through bottom-up and
top-down processes. Physical risks were rolled up from
business unit level, while a top-down assessment was
conducted of strategic and market risks. Physical and
transition risks were assessed with the assistance of
third-party consultants, using Munich Re’s Location Risk
Intelligence tool, which provides a geospatial natural hazard
risk assessment across future time horizons and scenarios.
Operations/Strategy
Risk, progress and metrics
ESG SteerCo
ESG Working Group
ESG Core Team
Executive
Committee
Audit
and Risk
Committee
Board of
Directors
Climate-related governance
Overall climate
change responsibility
Management of
climate control
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Task Force on Climate-Related Financial Disclosures Report continued
Climate-related transition risks were reviewed by senior
management and took into account the comprehensive
Double Materiality Assessment conducted during the year
as part of the Group’s CSRD preparation. This process
enabled the Group to identify the material impacts, risks and
opportunities (IROs), across a wide range of sustainability
topics including climate change and gave the opportunity
to review the previously identified climate-related risks and
opportunities with input from a wide range of internal and
external stakeholders. While this process did not identify
any new climate-related risks or opportunities that may be
considered material, it affirmed the validity of our previous
climate risk assessments. Additionally, four climate-related
impacts were identified that were considered to have
the potential to materially affect external stakeholders of
the Group.
Risk classification is assessed both through qualitative
measures and quantifiable indicators, including Key
Risk Indicators (KRIs) such as the impact on the Group’s
revenue, profit and share price. Impact of opportunities is
assessed using the inverse of the scale below.
Insignificant
Low
Moderate
High
Critical
Substantive impacts are those that would have a significant
adverse impact on the Group’s business, materially affecting
its business model, future performance, solvency, liquidity or
reputation. Risks are subject to continual refinement and
quantification over time, which assists with incorporation of
climate-related risks into the overall strategy, budgeting and
financial statements.
In line with best practice, we assess the magnitude of
climate risks using the same parameters as other risks in
the overall risk management framework. Potential risks are
assessed according to their occurrence within the short
(0–3 years), medium (3–10 years), or long term (10+ years),
which is sufficient to incorporate our 2040 net zero targets
and time for certain climate-related risks to manifest.
Strategy
The Group recognises that climate change presents both
risks and opportunities to our business. Overall, based
on our analysis and quantification of climate-related
risks, we consider our climate exposure to be low, and in
isolation the impact of most climate-related risks is limited.
Having considered the below risks and opportunities,
we conclude that the Group’s strategy is resilient to
climate change cross the short, medium and long term,
with financial impacts classified as moderate at worst,
but likely lower. Mitigating actions are in place or planned
to further reduce and minimise the impact of these risks.
Any impact will be accommodated into business-as-usual
activity, so no fundamental change to the business strategy
or budgets resulting from climate change is likely to be
required in the foreseeable future. In addition, there are no
effects of climate-related matters reflected in judgements
and estimates applied in the financial statements.
Our approach to scenario analysis
We have used scenario analysis to improve our
understanding of the behaviour of certain risks under
different climate outcomes, which helps to assess the
resilience of the business to climate change. The Group
used two scenarios for analysis of transition risks and
opportunities, with a horizon of 2040. These scenarios,
derived from the International Energy Agency (IEA) are
more descriptive and therefore especially useful for
modelling more positive climate forecasts.
• Net-Zero 2040 (NZE) an ambitious scenario which sets
out a narrow but achievable pathway for the global energy
sector to achieve net zero CO2 emissions by 2040.
This meets the TCFD requirement of using a ‘below 2°C’
scenario and is included as it informs the decarbonisation
pathways used by SBTi, which validates corporate net
zero targets and ambition.
• Stated Policies Scenario (STEPS) a scenario which
represents the roll forward of already announced policy
measures. This scenario outlines a combination of
physical and transitions risk impacts as temperatures
rise by around 2.5°C by 2100 from pre-industrial levels,
with a 50% probability. This scenario is included as it
represents a base case pathway with a trajectory implied
by today’s policy settings.
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Task Force on Climate-Related Financial Disclosures Report continued
Additionally, the Group has used four climate-related
scenarios for our physical risk assessment, which are the
default scenarios in the Location Risk Intelligence software,
modelled by the Intergovernmental Panel on Climate
Change (IPCC).
• RCP 2.61: A climate-positive pathway, likely to keep global
temperature rise below 2°C by 2100. CO2 emissions start
declining by 2020 and go to zero by 2100.
• RCP 4.5: An intermediate and probably baseline scenario
more likely than not to result in global temperature rise
between 2°C and 3°C, by 2100 with a mean sea level
rise 35% higher than that of RCP 2.6. Many plant and
animal species will be unable to adapt to the effects of
RCP 4.5 and higher RCPs. Emissions peak around 2040,
then decline.
• RCP 7.0: Consists of a baseline outcome rather than a
mitigation target, and represents the medium-to-high end
of the range of future emissions and warming resulting
from no additional climate policy.
• RCP 8.5: A bad case scenario where global temperatures
rise between 4.1–4.8°C by 2100. This scenario is included
for its extreme impacts on physical climate risks as the
global response to mitigating climate change is limited.
Assumptions and limitations
Where appropriate, scenarios were supplemented by
additional sources that are specific to each risk. We note
that scenario analysis involves a range of assumptions
and limitations applicable to both physical and transition
risks, including:
1. Scenarios often only provide high level global and
regional forecasts;
2. Not all risks are easily subject to scenario analysis;
Scenario analysis requires analysis of specific factors
and modelling them with fixed assumptions;
3. It is assumed that S4Capital will have the same carbon
footprint and the same business activities in the future
as are in place today;
4. Impacts are to be considered in the context of the
current financial performance and prices;
5. Impacts are assumed to occur without the Group
responding with any mitigation actions, which would
reduce the impact of risks;
6. Impacts are modelled to occur in a linear fashion,
when in practice dramatic climate-related impacts may
occur suddenly after tipping points are breached; and
7. The analysis considered each risk and scenario in
isolation, when in practice climate-related risks may
occur in parallel as part of a wider set of potential
global impacts.
Carbon pricing was informed by the Global Energy Outlook
2024 report from the International Energy Agency (IEA).
Risks, opportunities and impacts
For the relevant risks below, we have determined
quantifiable impacts where the underlying data is available
and where the current understanding of the risk is robust.
Scenarios have been supplemented with additional sources
that are specific to each risk to inform any assumptions
included in projections. Having assessed the behaviour
of these risks under different scenarios, we are satisfied
that our risk mitigation strategies and action plans provide
sufficient financial resilience to climate change.
Four key climate transition risks, and two physical climate
risks have been identified. These risks have been assessed
in isolation and categorised as low impact. The resilience of
S4Capital to climate-related risks was undertaken across all
sites and operations. The entire value chain was assessed
for transition risks. However, a physical risk assessment of
suppliers was not conducted due to the nature of the supply
chain, which is highly diversified, making any climate-
related physical risks in the value chain extremely limited.
The Group acknowledges that the cumulative impact could
be greater if more than one of these risks were to manifest
at the same time.
Physical risk assessment
Towards the end of the year, the Group conducted a site-
specific physical climate risk assessment with external
consultants using Munich Re’s Location Risk Intelligence
tool. This geospatial natural hazard software enabled more
detailed analysis of individual sites’ exposure to a range of
climate-related hazards under different scenarios and time
horizons. Hazards assessed in the year included:
• River flooding
• Tropical cyclones
• Storm surges
• Fire weather stress
• Drought stress
• Heat stress
• Precipitation stress
• Cold stress
• Sea level rise
While the Group’s overall exposure to physical climate
risks was limited, the risk assessment did identify exposure
to fire weather stress and precipitation stress across the
Group’s locations. However, these risks are mitigated
by the ability of the vast majority of employees to work
remotely, our diversified portfolio of offices with short-term
leases across the world, insurance recovery in the event of
natural disasters and flexibility to relocate from potentially
hazardous areas which provides strong resilience even
under a severe global warming scenario.
Note:
1. IPCC (2014), Climate Change 2014: AR 5 Synthesis Report.
Contribution of Working Groups I, II and III to the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change.
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Task Force on Climate-Related Financial Disclosures Report continued
Transition risk
Emerging regulatory risk
and reporting requirements
Reputational risk
Carbon pricing in own operations
Risk description
Sustainability regulations are consolidating.
The pace and complexity of sustainability
regulatory change in our key markets presents
a risk of non-compliance if appropriate internal
controls are not maintained.
Clients incorporate sustainability requirements into
their tenders and require supplier carbon assessments.
Many clients consider sustainability criteria including
ESG framework scores in RFI/RFP process.
Failure to meet the Group’s recently approved SBTi
targets could cause reputational damage.
Cost of carbon is expected to rise. Abrupt increases to
carbon prices during a disorderly transition to net zero
may cause a particularly significant financial shock,
if unmitigated.
Type
Transition (current and emerging regulation)
Transition (emerging regulation)
Transition (emerging regulation)
Area
Own operations
Downstream
Own operations
Financial impact
Revenue and operational costs
Revenue
Operational costs
KPIs
• Timely reporting of relevant regulations
• External ESG ratings (e.g. EcoVadis, B Corp)
• Total GHG emissions
• Scope 1 and 2 emissions
Mitigation and
response
• Creation of ESG SteerCo with executive
oversight and ESG Working Group with
individual data owners
• Group ESG Reporting Lead with
ESG experience
• Implementation of ESG software
• Creation of ESG SteerCo with executive oversight
• Implementation of ESG software
• Group ESG Reporting Lead with ESG experience
• Implementation of transition plan
• SBTi targets to reduce Scope 1 and 2 emissions 42%
by 2030 and 90% by 2040 from 2022
• Purchase of renewable electricity
• Implementation of transition plan
Time horizon
Short-medium
Short-medium
Long
Likelihood
Likely
Likely
Unlikely
Impact
Low
Low
Low
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Financial statements
Task Force on Climate-Related Financial Disclosures Report continued
Opportunities
Access to new markets
Development and/or expansion of low emission services
Carbon reduction initiatives
Opportunity
description
New lines of business related to sustainability, such
as expanding sustainability consultancy/advisory
work, represents an opportunity to capitalise on
growing climate awareness among clients.
Continue to expand sustainable production
solutions for clients.
Enhancing environmental credibility through
improved practices and transparency of reporting
may lead to new revenue opportunities from
Purpose‑driven clients.
Reducing energy consumption and carbon emissions
through various initiatives across the Group’s office
portfolio may lead to reduced costs and lower
exposure to carbon pricing.
Area
Own operations
Own operations
Own operations
Financial impact
Increased revenues resulting from increased
demand for sustainable products and services
Increased revenues resulting from increased
demand for sustainable products and services
Reduces operational costs
KPIs
Revenue from For Good projects
Revenue from Purpose-driven clients
Scope 1 and 2 emissions
Adaption and
response
• Integrate sustainability solutions more
systematically into client work
• Continuous focus on innovation
• Increasing our revenue from Purpose-
driven clients
• Monks certified B Corp since August 2024
• Seek to reduce emissions from digital products
and shoots wherever possible
• Implementation of transition plan
• Greening of procured electricity mix through
Renewable Energy Certificates (RECs) and
consideration of Power Purchase Agreements
(PPAs), with all offices to use renewable electricity
by 2040
• Investment in resource and energy efficiency,
including LED lighting, refrigeration, insulation and
climate control systems
• Targeting 100% renewable vehicle fleet by 2030
• Travel policy to promote more sustainable
business travel
Time horizon
Short-medium
Short-medium
Medium-long
Impact
Low
Low
Low
Likelihood
More likely than not
Likely
Likely
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Task Force on Climate-Related Financial Disclosures Report continued
Metrics and targets
The Group established climate change targets ten
years ahead of the UK Government’s commitment to
achieving net zero by 2050. We report on our Scope 1,
2 and 3 emissions in accordance with the Greenhouse
Gas Protocol, including emissions intensity and energy
consumption metrics. For Scope 3, which constitutes the
majority of our total emissions footprint, we have analysed
all 15 categories and identified six material categories for
reporting: Purchased goods and services; Capital goods;
Fuel- and energy-related activities (not included in Scope 1
and 2); Waste generated in operations; Business travel;
and Employee commuting.
In June 2024, our Science-Based Targets were validated,
including commitments to:
• Reduce absolute Scope 1 and 2 greenhouse gas
emissions by 42% by 2030 from a 2022 base year.
• Reduce absolute Scope 3 greenhouse gas emissions by
25% by 2030 from a 2022 base year.
• Achieve a 90% reduction in absolute Scope 1, 2 and 3
emissions by 2040 from a 2022 base year.
Please refer to pages 30 and 92 for progress on our
Science-Based Targets and other targets.
Various actions are planned or underway to support these
targets, which were detailed in our Group transition plan.
We are committed to neutralising any residual emissions
by 2040 with removals to reach net zero emissions,
in compliance with the SBTi’s net zero standard.
Meeting Scope 1 and 2 targets will involve initiatives such as
improving electricity efficiency, collaborating with landlords
to switch to renewable energy, transitioning to less polluting
refrigerant systems, and purchasing Renewable Energy
Guarantees of Origin (REGOs) or RECs as interim solutions.
For Scope 3 targets, we will enhance data collection
processes across the Group, focusing on accurately
recording purchased goods and services and detailed
employee commuting data, along with increased
engagement with our suppliers. Business travel and
employee commuting emissions are prioritised within our
transition plan. We will enforce our Group business travel and
expenses policy, which considers transport carbon intensity,
to mitigate business travel emissions. Additionally, we will
encourage employees to adopt lower-carbon commuting
methods, such as public transport, walking, cycling and
transitioning personal vehicles to hybrid or electric options.
While we acknowledge the recommendation to integrate an
internal carbon price, we currently consider it unnecessary
and immaterial to our operations, as the Group is not carbon
intensive. We will keep this approach under review for future
large capital expenditures and investment evaluations.
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Non-financial and sustainability information statement
This section of the Strategic Report constitutes the Group’s Non-financial and sustainability information statement
for the purposes of sections 414CA and 414CB of the Companies Act 2006. The informed listed below is incorporated
by reference.
Reporting requirement
Policies
References
Climate-related
financial disclosures
This relates to S4Capital’s compliance with the TCFD recommendations,
Listing Rule LR 14.3.27R, and relevant provisions of the Companies Act 6.
These are included in our
TCFD Report, starting on
page 43
Environmental
matters
Approved SBTi emission reduction targets; Yearly GHG emission
disclosure; TCFD statement.
Starting on page 30
Employees
Global Code of Conduct; Anti Financial Crime Policy; Speak Up Policy;
Equal Opportunity Employment Statement; Health and Safety Standards;
Employee Empowerment; Acceptable Use Policy; Information Sensitivity
Policy; General Information Security Policy; Anti Hate Statement; Conflict
of Interest Policy; Global AI Policy; Global Travel and Expense Policy;
Remote Working Policy; Information Security and Privacy Policies;
Anti‑Misconduct Policy; Social Media Acceptable Use Policy.
Policies can be found
on S4Capital and
Monks websites
Human rights
Modern Slavery Act 2015 slavery and human trafficking statement; Global
Code of Conduct; Anti Financial Crime Policy; Accessibility Statement.
S4Capital and
Monks websites
Social matters
Global Code of Conduct; Anti Financial Crime Policy; Share Dealing
Code; Anti Hate Statement; Information Security and Compliance;
Ethical Marketing Policy; Armed Forces Covenant; Global Supplier
Code of Conduct.
S4Capital and
Monks websites
Anti-corruption and
anti-bribery
S4Capital has zero tolerance for any form of bribery or influence peddling.
We comply with the anti-bribery and corruption laws of the countries
where we operate, as well as those that apply across borders.
This statement is
included in our Global
Code of Conduct
and Anti Bribery and
Corruption Policy
Description of
principal risks and
impact of business
activities
The S4Capital Enterprise Risk Management Policy outlines the
governance processes and policies we have established to consistently
manage sustainability risks and opportunities across the organisation.
This is included in our
TCFD Report, starting
on page 43 and Principal
risks and uncertainties
starting on page 19
Description of the
business model
Reflected in our business model.
Pages 5 to 6
Non-financial KPIs
Performance KPIs align with our ESG strategy and include a range
of financial and non-financial metrics across three ESG pillars:
People Fulfilment, Our Responsibility to the World and One Brand.
Pages 30 to 42
Human rights
Respect for human rights is a fundamental principle for
S4Capital. We take seriously our responsibility to conduct
business in an ethical way. Monks has been a member of
the United Nations Global Compact (UNGC) since 2012.
The UNGC is a strategic policy initiative for businesses that
are committed to aligning their operations and strategies
with 10 universally accepted principles.
Anti-slavery and human trafficking
S4Capital does not tolerate modern slavery. We are
committed to assess and address any modern slavery risks
that may arise in the course of our business. As part of
this commitment, we are implementing a Supplier Code of
Conduct and seeking to educate our people on the risks,
and mitigations. This helps us identify and manage slavery
and human trafficking risk in accordance with the principles
of the Modern Slavery Act 2015 and related guidance.
Anti-bribery
S4Capital has zero tolerance for any form of bribery or
influence peddling. We aim to comply with the anti‑bribery
and corruption laws of the countries we operate in
and those that apply across borders. We do not offer,
pay, or accept bribes or kickbacks for any purpose,
either directly or through a third party. We do not make
facilitation payments or permit others to make them on
our behalf.
Whistleblowing policy
Key values of S4Capital are integrity and responsibility
– which link to our Core Principles of Authenticity,
Integrity and the highest Ethical Standards in our business
dealings. These apply in all our dealings within Monks,
working with clients, suppliers and in our communities.
Employees’ concerns are important to the Group and
we encourage all of our people to take advantage of the
Speak Up Policy.
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Sustainability Statement
Governance Report
Financial statements
Section 172(1) statement
Addressing the needs of our stakeholders
Section 172(1) of the Companies Act 2006 requires the
Directors to act in the way they consider, in good faith,
would most likely promote the success of the Company
for the benefit of its members as a whole. In doing so,
Section 172(1) requires the Directors to have regard,
amongst other matters, to the:
• likely consequences of any decision in the long term;
• interests of the Company’s employees;
• need to foster the Company’s business relationships
with suppliers, clients and others;
• impact of the Company’s operations on the community
and environment;
• desirability of the Company maintaining a reputation
for high standards of business conduct; and
• need to act fairly as between members of the Company.
In discharging our Section 172(1) duties the Directors
have regard to the above factors and any other factors
which we consider relevant to the decision being made.
We acknowledge that every decision we make will not
always result in a positive outcome for all our stakeholders.
However, by considering the Company’s purpose,
mission, values and strategic objectives, and having a
process in place for decision making, we aim to ensure
that our decisions are considered and proportionate.
Further details on how the Board operates and reflects
stakeholder views in its decision making are set out in
the Corporate Governance Report on pages 58 to 103.
Engagement with stakeholders
Our stakeholders
Building strong, constructive relationships and engaging
regularly are key to ensuring we understand what matters
to our stakeholders. Our broad range of stakeholders,
representing different and often competing interests,
bring informative and diverse perspectives to our decision
making. Incorporating those perspectives into our decision
making is a vital part of the execution of our long-term
strategy. Our clients, our people and our shareowners are
our key stakeholder groups, along with our communities
and our suppliers (including our lenders).
The Board recognises that engagement with the Company’s
stakeholders is critical to the success of the business in
realising this mission. The Directors continue to have regard
to the interest of our people and the Company’s other
stakeholders, including the impact of its activities on the
community, the environment and the Company’s reputation
when making decisions. We recognise that promoting the
long-term sustainability and success of the Company is
intertwined with creating value for, and engagement with,
our stakeholders. It is rightfully, therefore, at the core of
our business.
Information provided by management is shared with the
Board and direct engagement with stakeholders takes
place throughout the year. Stakeholder considerations are
taken into account as discussions at meetings of the Board
and its Committees, as well as informally in the day-to-day
activities of the business.
Overleaf we set out who we consider to be our principal
stakeholders, including information on our methods
of engagement with them, and the impact of such
engagement on the Company’s decisions and strategies.
The Directors are fully aware of their responsibilities to
promote the success of the Company in accordance
with Section 172(1) of the Act. Our intention is to behave
responsibly and ensure that management operates the
business in a responsible manner, operating within the
high standards of business conduct and good governance
expected of us.
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
What are the key
interests of our
stakeholders?
Section 172(1) statement continued
Creation of social value, supporting
sustainability initiatives and
community education.
A productive and fair working relationship
through collaboration, innovation and
shared values.
Robust financial accounts, sustainable
long‑term growth in the Company and
its share price, sound investment and
combination decisions and effective
communication of strategy.
Our clients
Our communities
and the environment
Our suppliers
Our people
Our shareowners
We facilitate the provision of first-party data
to fuel creative content and digital media
planning and digital content, the design and
development of digital creative content and
provision of programmes to allow our clients
to efficiently plan and deliver audience-
focused campaigns.
Creating a positive environment for our
people that encourages and supports
personal development and career
progression through impactful programmes
and opportunities, flexible and agile working,
and a strong commitment to inclusion
and diversity.
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Governance Report
Financial statements
Section 172(1) statement continued
• Our mission for S4Capital is driven by engagement with
our clients and our mantra of ‘speed, quality, value and
more, with AI’.
• We have combined best-in-class practices, promoting
alignment, an integrated service offering and
emphasising transparency to clients.
How we engage
• We work alongside our clients on a day-by-day, hour-
by-hour basis, helping them communicate with their
audiences in a continuous loop.
• We continuously evolve how we communicate and deliver
our services based on client feedback.
• We co-locate or embed our people, which not only
facilitates clear communication, collaboration and
teamwork, but also leaves a light environmental footprint.
• We continuously focus to implement (more) sustainable
solutions throughout our processes and advise our clients
on the next best solution in our industry.
How the Board engages
• Our executive leadership team, regional leadership
and client/growth leaders provide updates to the
Board regarding key markets, clients and new
business opportunities.
• Senior client executives present directly to the Board,
giving their perspective on client agency relationships
and opportunities.
Outcomes
• We continue to build our existing and new client base,
with significant assignments from some of the world’s
top companies and at a local level. Our retention
and new business rates are strong, often boosted by
cross‑practice pitches and referrals.
• Our people are central to our business. They play a
significant role in the delivery of our strategy and the
future growth of our business.
• We recognise the importance of attracting, developing and
retaining the best talent, and the need to provide a safe
and inclusive environment where individuals can thrive.
How we engage
• Our unitary structure, with a single P&L, gives our
people a sense of common values, shared goals and
a collaborative spirit.
• We have an active internal communications programme
to keep our people engaged and informed on Group
strategy, progress and development. This includes regular
All-Hands meetings and team briefings on matters
important to our global talent pool and a weekly ‘State
of our One Nation’ email from the Executive Chairman
to all Monks.
• We provide programmes to support connection and
development, fostering a culture of collaboration
and growth.
• We conduct regular employee surveys and use this
feedback to improve our performance and culture and
make the results part of our materiality analysis.
• Our culture is one of openness and transparency,
where everyone has a voice and is free to raise
questions and issues of concern.
How the Board engages
• Our Non-Executive Directors collectively share
responsibility for employee engagement and report
to the Board on their findings.
• In addition, Miles Young has been designated as the
Independent Non-Executive Director responsible for
overseeing culture.
• The Board receives updates from our Global Chief People
Officer on communication activities with our people.
• The Nomination and Remuneration Committee reviews
diversity initiatives across the Group and senior
leadership succession plans.
Outcomes
• Launched in 2023, Accelerate.Monks is our global
training and educational programme, operating across
all regions and job levels. In 2024 over 800 Monks
increased their business acumen and industry knowledge
through the programme. Over six months, our people
learn leadership, presentation skills, business process
modelling, and more. Monks who participated for the full
programme duration received a certification.
• Our community groups are set up internally by Monks
to support and learn from one another, and are actively
promoted to advance the understanding and inclusion
of Monks with common life experiences, including Pride.
Monks, Enable.Monks, Melanin.Monks, Cultura.Monks,
Caregiver.Monks, APINH.Monks and WoMMen in Tech.
Community groups address the topics that really matter
to our people, and they are fully supported by executive
leadership. Further information is available on page 42.
• We continue to run our S4 Women’s Leadership and S4
Fellowship Programs aimed at developing our female
leaders, and fostering the next generation of talent
by empowering students from traditionally under-
represented communities, respectively.
Our clients
Our people
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Financial statements
Section 172(1) statement continued
• The Board recognises and supports the continuing
focus on ESG and sustainability, especially on the
environment and climate change, and aims to operate
in a sustainable and responsible way, while delivering
value for shareowners.
How we engage
• Our businesses and people support local initiatives
through donated hours and money, or physical efforts
though charity runs or cycles. We continue to connect
with diverse talent from middle school to university
students, through education and engagement.
• We contribute to society by actively sharing our talents,
digital expertise and thought leadership and offering it
to NGOs, social initiatives and charity projects.
How the Board engages
• The Board has oversight of our ESG strategy.
• ESG-related targets are included in the Group’s
annual performance targets, which are linked to the
annual bonus.
• Mary Basterfield, an Executive Director, and Miles
Young, an Independent Non-Executive Director, together
champion our sustainability efforts. More information on
our sustainability and ESG activities is available on pages
26 to 56 and in the Monks annual ESG Report.
Outcomes
• We have continued our S4 flagship programmes in 2024.
• Our Science-Based Targets were accredited and
approved, reinforcing our commitment to measurable
emissions reductions.
• We made charitable donations totalling £78,136 in 2024.
• Beyond financial contributions, we actively encourage
and support our people in giving back to their
communities through volunteer work. In 2024, we have
recorded 3,184 hours of volunteer service, a significant
increase compared to 2023.
• The S4 Forest, our carbon offsetting and reforestation
initiative, has now planted a total of 506,322 trees over
the last four years.
Our communities and the environment
• We rely on suppliers to help deliver our services to clients
and maintain our productivity, as well as helping to make
our supply chain as sustainable and diverse as possible.
• Strong relationships with suppliers can bring innovative
approaches and solutions that create shared value.
How we engage
• We ask our suppliers to commit to upholding the principles
of our Global Code of Conduct, including fundamental
standards on human rights, modern slavery and the
prevention of financial crime.
• We aim to have a fair and transparent relationship with
our suppliers and partners through regular dialogue and
annual surveys on performance and ESG matters.
• We comply with non-financial or supplier diversity
reporting frameworks like EcoVadis, CDP and UniTier
for transparency in reporting.
How the Board engages
• The Board approved our Sustainable Procurement Policy.
Outcomes
• We build and maintain collaborative, long-term
relationships with our suppliers.
Our suppliers
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Sustainability Statement
Governance Report
Financial statements
Section 172(1) statement continued
• We recognise the importance of providing all of
our shareowners with regular updates on our
operations, financial performance and ESG activities.
Engagement with shareowners gives us a broad insight
into their priorities, which influences our own decision
making and our strategic direction. The ongoing support
of our shareowners during 2024 is something that we
continue to value greatly.
How we engage
• We maintain regular contact with our shareowners
through a comprehensive investor relations programme of
conferences, roadshows and meetings, predominantly led
by our Executive Chairman, Group Chief Financial Officer
and Chief Growth Officer.
• After each quarterly results announcement, we have held
extensive roadshows with investors.
• All our investor presentations, reports and earnings calls
are available on the S4Capital website.
Our shareowners
How the Board engages
• Our AGM provides the opportunity for our private
shareowners to hear from and engage directly with
the Board.
• During 2024, the Executive Chairman, Group Chief
Financial Officer and Chief Growth Officer held over
200 meetings, in person and virtually, to engage with
institutional investors and analysts. More information
is available on pages 73 and 74.
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Sustainability Statement
Governance Report
Financial statements
Governance
Report
Corporate governance statement of compliance
58
Leadership: Board of Directors
60
Leadership: Executive Committee
64
Executive Chairman’s statement
65
The role of the Board
67
Audit and Risk Committee Report
75
Nomination and Remuneration Committee Report
79
Remuneration Report
84
Directors’ Report
101
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
S4Capital plc Annual Report and Accounts 2024
57
During the year, the Board has
voluntarily complied with the
UK Corporate Governance Code
(the Code) which was issued by
the Financial Reporting Council
in 2018.
The Board confirms that, for the year under review and
to the date of this report, the Company has applied all
of the principles of the Code. However, it did not comply
in full with Provisions 9, 36 and 37, as further described
on page 59. This report, together with the reports from
the Audit and Risk Committee and the Nomination
and Remuneration Committee, and the other statutory
disclosures, provides details of how the Company has
applied the provisions of the Code (pages 75 to 100).
The following table outlines how we have structured the
governance section of this Annual Report and Accounts
around the Code.
Corporate governance statement of compliance
Provision
Further information
Page
Board leadership and Company purpose
1
Strategic Report
Risks
Sustainability
Governance
8 to 24
19
25
57
2
Culture
Board activities
Workforce remuneration
69
68
98
3
Shareholder engagement
74
4
Significant votes against
99
5
Stakeholder engagement
Workforce engagement
73 to 74
73
6
Whistleblowing
51
7
Managing conflicts of interest
69
Division of responsibilities
9
Division of responsibilities
70
10
Director independence
67
11
Board composition
65
12
Senior Independent Director
70
13
Non-Executive Directors
70
14
Roles of the Board
Division of responsibilities
70
70
15
Director biographies and
external appointments
60 to 63
16
Company Secretary
70
Composition, succession and evaluation
17
Nomination and Remuneration
Committee Report
79
18
Election and re-election of Directors
71
19
Chair tenure
70
20
Board member recruitment
88, 91
21 and 22 Board evaluation
71 to 72
23
Nomination and Remuneration
Committee Report
79
Provision
Further information
Page
Audit, Risk and internal control
24
Audit and Risk Committee Report
75
25
Key responsibilities of the Audit
and Risk Committee
76
26
Audit and Risk Committee Report
75
27
Fair, balanced and
understandable assessment
77
28
Principal risks and uncertainties
19
29
Risk management and internal control
77
30
Going concern
119
31
Viability Statement
23
Remuneration
32
Remuneration Committee:
Composition and report
68
33
Remuneration Policy
84
34
Non-Executive Director remuneration
94
35
Advice provided to the
Remuneration Committee
100
36
Shareholding requirements:
Remuneration Policy statement
94
37 and 38 Remuneration Policy
84
39
Executive Directors’ service
agreements and loss of
office entitlements
88
40 and 41 Report of the
Remuneration Committee
79
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Sustainability Statement
Governance Report
Financial statements
Non-compliance
Provision
Explanation
9. The chair should be independent on appointment when assessed against the
circumstances set out in Provision 10. The roles of chair and chief executive should not be
exercised by the same individual. A chief executive should not become chair of the same
company. If, exceptionally, this is proposed by the Board, major shareholders should be
consulted ahead of appointment. The board should set out its reasons to all shareholders
at the time of the appointment and also publish these on the company website.
The Board recognises that Sir Martin Sorrell’s position as Executive Chairman, which he
has held since the Group’s foundation, exercising the roles of both Chairman and Chief
Executive Officer, is a departure from the Code.
Sir Martin has been a leading figure in the marketing and communications services industry
for over 40 years and the Board acknowledges that his expertise, knowledge and global
network of relationships are an unparalleled advantage to the Group. In light of this,
the Board, in particular through the work of its Nomination and Remuneration Committee,
regularly assesses the appropriateness of this arrangement and will continue to do so and
recommend changes, as appropriate. The Independent Non-Executive Directors have
concluded that the position remained appropriate for the year under review.
Control enhancements
• Governance structure reviews – The Independent Non-Executive Directors meet regularly
in private sessions, chaired by the Senior Independent Director. The meeting includes
consideration of the appropriateness of the governance structure and safeguards
for shareowners.
• The Chairs of the Board Committees, all of whom are Independent Non-Executive
Directors, dedicate a significant amount of time in the oversight of the functions
that report to each respective Committee and have in-depth relationships with
relevant executives.
36. Remuneration schemes should promote long-term shareholdings by executive directors
that support alignment with long-term shareholder interests. Share awards granted for
this purpose should be released for sale on a phased basis and be subject to a total
vesting and holding period of five years or more. The Remuneration Committee should
develop a formal policy for post-employment shareholding requirements encompassing
both unvested and vested shares.
The Board acknowledges that the grant of shares to the Group Chief Financial Officer
spans a four-year period. The use of an overall four-year performance period for most of
the award, structured as successive one-year periods rather than the standard three-year
period, recognises that, as S4Capital continues to grow and evolve, each of the four years
is critical. This approach was also designed to be competitive in the context of the
international markets in which the Company operates, where performance and vesting
periods can be shorter than the UK norm.
37. Remuneration schemes and policies should enable the use of discretion to override
formulaic outcomes. They should also include provisions that would enable the
company to recover and/or withhold sums or share awards and specify the
circumstances in which it would be appropriate to do so.
While the Nomination and Remuneration Committee cannot override the formulaic outcome
of the Incentive Share Scheme (A1/A2 shares), the Board believes that the scheme is
aligned with the wider shareowner experience due to the long-term nature of the scheme.
Furthermore, the participants only receive benefits once shareowners have experienced
significant growth in the value of their investment.
Corporate governance statement of compliance continued
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Sustainability Statement
Governance Report
Financial statements
Leadership: Board of Directors
We are
guided by
strong
leadership
Committee membership:
Audit and
Risk Committee
AR
Executive
Committee
EC
Nomination and
Remuneration Committee
NR
Denotes Chair
of Committee
*
Sir Martin was Founder and 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. When Sir Martin left in April 2018, WPP had a
market capitalisation of over £16 billion and revenues of
over £15 billion.
Sir Martin supports a number of leading business schools
and universities, including his alma maters, Harvard Business
School and Cambridge University, and a number of charities,
including his family foundation. He has been nominated as
one of the TIME 100: The Most Influential People and received
the Harvard Business School Alumni Achievement Award.
Key skills
• Corporate governance
• Legal and regulatory
• Corporate transactions
• Finance
• Risk and compliance
• Global media, marketing and advertising
• Strategy and M&A
• Technology
• ESG
• Organisational design and corporate culture
Current external appointments
• Director, Bloomberg Philanthropies
Sir Martin Sorrell
Executive Chairman
Appointed: 28 September 2018
Nationality: British
EC
Prior to joining S4Capital, Mary was Group Finance Director
at Just Eat PLC, where she led the Finance team through the
class 1 merger with Takeaway.com. Her experience spans
e-commerce, media, strategy and financial management of
businesses undergoing rapid growth and change.
Mary’s previous roles include CFO at UKTV and CFO for
Hotels.com at Expedia Group Inc. She began her career
in the music industry and held senior finance positions at
Warner Music and Sony Music.
Key skills
• Finance
• Strategy and M&A
• Corporate governance
• Corporate transactions
• Risk and compliance
• Technology
• Organisational design and corporate culture
Current external appointments
• None
Mary Basterfield
Group Chief Financial Officer
Appointed: 3 January 2022
Nationality: British
EC
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Leadership: Board of Directors continued
Elizabeth is Chief Commercial Officer of Rokt, the leading
global ecommerce technology company.
A proven tech and business leader with a bias for action,
Elizabeth has spent more than 25 years in technology,
marketing and advertising.
Key skills
• Finance
• Global media, marketing and advertising
• Strategy and M&A
• Technology
• ESG
• Information security, cyber security, privacy
• Organisational design and corporate culture
Current external appointments
• Board member of NGO Vital Voices Global Partnership
• Chief Commercial Officer, Rokt
Elizabeth Buchanan
Independent Non-Executive Director
Appointed: 12 July 2019
Nationality: Australian
Colin brings significant experience in financial, management
and governance roles including Non-Executive Chairman
of Premier Foods plc, Chief Executive of Essentra plc and
15 years of experience as Chief Financial Officer of both
Reckitt Benckiser plc and Aegis plc.
He has served as a Non-Executive Director on the boards of
major UK-listed businesses including Amec Foster Wheeler,
WPP, Cadbury, Imperial Brands, Meggitt, Euromoney
Institutional Investor and easyJet.
Key skills
• Corporate governance
• Legal and regulatory
• Corporate transactions
• Finance
• Risk and compliance
• Strategy and M&A
• ESG
• Information security, cyber security, privacy
• Organisational design and corporate culture
Current external appointments
• Chair of Premier Foods Plc
• Non-Executive Director, Cranfield University
• Non-Executive Director, FM Global
Colin Day
Independent
Non-Executive Director
Appointed: 3 August 2022
Nationality: British
Rupert qualified as a Chartered Accountant with Peat
Marwick Mitchell in 1972. He joined Samuel Montagu in
1977 to pursue a career in corporate finance. Over a period
of 34 years, Rupert advised major corporate clients on
mergers, acquisitions, IPOs and capital raisings, including
advising WPP on its acquisitions of JWT, Ogilvy & Mather
and Cordiant, together with related funding. He was
appointed a director of Samuel Montagu in 1982 and was
Head of Corporate Finance between 1993 and 1998.
He was a Managing Director of HSBC Investment Banking
until his retirement in 2011.
Key skills
• Corporate governance
• Legal and regulatory
• Corporate transactions
• Finance
• Risk and compliance
• Strategy and M&A
Current external appointments
• Trustee of the Landisdale Almshouses and the Hospital
and Homes of St Giles
Rupert Faure Walker
Senior Independent
Non-Executive Director
Appointed: 28 September 2018
Nationality: British
AR
Committee membership:
Audit and
Risk Committee
AR
Executive
Committee
EC
Nomination and
Remuneration Committee
NR
Denotes Chair
of Committee
*
AR*
NR
NR
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Sustainability Statement
Governance Report
Financial statements
Margaret is President and CEO of Asia, Informa Markets,
overseeing its businesses in mainland China, Hong Kong,
Japan, Korea, Singapore, Thailand, Indonesia, Malaysia,
Vietnam, the Philippines and Cambodia, a portfolio of more
than 200 brands, which include industry-leading exhibitions
and digital services across 11 countries and regions.
Margaret joined UBM in 2008, before its combination with
Informa in 2018.
In the last 16 years, she spearheaded multiple milestones in
key market sectors and has successfully grown the business
through organic development and strategic partnerships,
including 26 equity joint ventures. Prior to this, she held
senior positions at TNT (now FedEx) and Global Sources
(now Clarion Events). Margaret is a member of WomenExecs
on Boards (WEoB) and National Association of Corporate
Directors (NACD). She received an MBA degree from
Oxford Brookes Business School with Corporate Director
Certificate from Harvard Business School.
Key skills
• Corporate governance
• Legal and regulatory
• Finance
• Risk and compliance
• Strategy and M&A
• Technology
• ESG
• Information security, cyber security, privacy
• Organisational design and corporate culture
Current external appointments
• President and CEO of Asia, Informa Markets
Margaret Ma Connolly
Independent
Non-Executive Director
Appointed: 10 December 2019
Nationality: American and Chinese
Daniel Pinto is the Founder, Chairman and CEO of Stanhope
Capital Group, the global investment management and
advisory group overseeing approximately US$40 billion
of client assets. He has considerable experience in asset
management and merchant banking having advised
prominent families, entrepreneurs, corporations and
governments for over 25 years.
Formerly Senior Banker at UBS Warburg in London and
Paris concentrating on mergers and acquisitions, he was
a member of the firm’s Executive Committee in France.
He was also Chief Executive of a private equity fund backed
by CVC Capital Partners. Daniel founded the New City
Initiative, a think tank comprised of the leading independent
UK and European investment management firms. He is the
author of Capital Wars (Bloomsbury 2014), a book which
won the prestigious Prix Turgot (Prix du Jury) and the HEC/
Manpower Foundation prize.
Key skills
• Corporate governance
• Corporate transactions
• Finance
• Strategy and M&A
Current external appointments
• Director of Soparexo (Holding of Chateau Margaux)
• Chairman and CEO of Stanhope Capital Group
Daniel Pinto
Independent
Non-Executive Director
Appointed: 24 December 2018
Nationality: French and British
Sue is a qualified solicitor and barrister at Brick Court
Chambers, where she practices as an arbitrator and
mediator and provides advice to commercial clients. She has
over 30 years of experience of arguing and managing large
complex commercial cases at every level of the UK judicial
system and in arbitration.
From 2008–2020, Sue was Co-Managing Partner of law
firm Quinn Emanuel Urquhart & Sullivan (UK) LLP where her
clients included major corporates, funds, investors, trustees,
office holders and high net worth individuals, for whom she
managed complex, high value, domestic and international
litigation. Sue has particular expertise in company,
insolvency-related, securitisation and restructuring litigation.
She moved back to the Bar in 2020.
Key skills
• Corporate governance
• Legal and regulatory
• Corporate transactions
• Risk and compliance
• Strategy and M&A
• Organisational design and corporate culture
Current external appointments
• Chair of the Trustees of The Freud Museum
• Director at the Hampstead Theatre
• Non-Executive Director, BLOC Ventures Holding
Sue Prevezer KC
Independent
Non-Executive Director
Appointed: 14 November 2018
Nationality: British
AR
NR*
Leadership: Board of Directors continued
Committee membership:
Audit and
Risk Committee
AR
Executive
Committee
EC
Nomination and
Remuneration Committee
NR
Denotes Chair
of Committee
*
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Governance Report
Financial statements
Miles spent almost 35 years at Ogilvy, ultimately as its global
Chairman and CEO. He is currently the Warden of New
College at Oxford University.
Miles joined what was then the ‘advertising’ business from
Oxford in 1973, eventually moving to Ogilvy & Mather.
After a period in the Asia-Pacific region based in Hong
Kong, and working especially in China, he moved to New
York in 2008 as Chief Executive, then Chairman of Ogilvy &
Mather Worldwide. From then until 2016 Miles led a period of
strong client growth and creative success.
In 2016, Miles returned to his Alma Mater of New College in
Oxford, where he is Warden. He is President of the Oxford
Literary Festival and Chair of the Oxford Bach Soloists,
amongst other voluntary activities.
Miles is actively engaged in ESG efforts, maintaining
oversight of S4Capital’s ESG performance and instrumental
in the development of disruptive and innovative
ESG initiatives.
Key skills
• Corporate governance
• Risk and compliance
• Global media, marketing and advertising
• ESG
• Information security, cyber security, privacy
• Organisational design and corporate culture
Current external appointments
• Warden of New College, Oxford University
Caroline spent over a decade in-house gaining broad and
extensive experience at large, complex asset managers.
She joined S4Capital in June 2022 from the Canada Pension
Plan Investment Board (Toronto and London) where she was
a senior member of the legal and compliance teams.
Caroline was in private practice earlier in her legal career
at Ashurst and Milbank in the City of London. She obtained
her legal degrees and masters in France and the UK and
is qualified to practice law in England and Wales and
Ontario, Canada.
Miles Young
Independent Non-Executive Director
Appointed: 1 July 2020
Nationality: British
Board support
Caroline Kowall
General Counsel, Head of
Compliance and Company Secretary
Leadership: Board of Directors continued
NR
Committee membership:
Audit and
Risk Committee
AR
Executive
Committee
EC
Nomination and
Remuneration Committee
NR
Denotes Chair
of Committee
*
EC
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Sustainability Statement
Governance Report
Financial statements
Leadership: Executive Committee
Sir Martin Sorrell, Mary Basterfield and Caroline Kowall are
also members of the Executive Committee. Their details
appear on the preceding pages.
Scott joined S4Capital from artificial intelligence company
Eureka, where he continues to serve as a board member and
adviser. Previously, Scott spent almost 15 years at WPP in
various roles in London, Shanghai and Singapore and was
ultimately the Global Chief Strategy and Digital Officer.
In 2006 Scott moved to China and oversaw a period of rapid
growth and multiple acquisitions, responsible for WPP´s
corporate strategy and growth agenda. Scott was also a
director of Nairobi-listed WPP-Scangroup PLC. Prior to WPP,
Scott worked at Deloitte and Associated Newspapers.
Prior to joining the Group, Jean-Benoit was a Senior Partner
at Ernst & Young for approximately 18 years, where he held
various leadership roles, including being the Technology,
Media and Telecommunications Leader, Head of Industries
and part of the original management team to build the
Consulting practice.
Jean-Benoit has also spent the last 12 years at EY advising
boards and management teams in the advertising and
media industry on strategic and operational initiatives.
His experience spans across strategic growth; commercial,
organisational and operational effectiveness; margin
improvement and enterprise-wide transformation.
His previous roles include being Vice President at Capgemini
Consulting and Managing Director at a couple of CRM
consultancies. His 34 years in professional services spans
across North America, Europe and Asia.
Bruno Lambertini is a distinguished entrepreneur and CEO
of Monks’ Marketing Services practice.
Bruno’s journey commenced in 2005 with the founding
of Circus Marketing in CDMX, a venture that rapidly
expanded into a multinational enterprise spanning eight
countries. By championing social-first brands, Bruno’s keen
discernment of emerging digital opportunities propelled
Circus Marketing to the vanguard of innovation.
In 2020, Bruno arranged the pivotal merger between Circus
Marketing and Media.Monks/S4Capital, a transformative
moment for the company. His leadership played a pivotal
role in enhancing Media.Monks’ social capabilities and
fostering strategic partnerships with esteemed brands.
With his profound influence on the marketing and
advertising sectors, he is a catalyst for industry innovation
and advancement.
Scott Spirit
Chief Growth Officer
Nationality: British
Jean-Benoit Berty
Group Chief Operating Officer
Nationality: French
Bruno Lambertini
CEO, Marketing Services
Nationality: Argentinian
Wesley is Co-Founder of Media.Monks, and former Chief
Operating Officer of the legacy Media.Monks brand.
Wesley co-founded Media.Monks in 2001 to focus on craft
and creativity in digital, working tirelessly to grow that
company into a creative production powerhouse with global
reach and recognition that merged with S4Capital in 2018.
Wesley ter Haar
Chief AI and Revenue Officer
Nationality: Dutch
James Nicholas Kinney is a seasoned Chief People Officer
with a track record of leading two billion-dollar organisations
and overseeing 30,000 employees across 40 countries.
He brings deep cross-functional expertise in people and
operations and is recognised as a people transformation
and culture expert across various business industries.
James is a member of the Forbes Human Resources
Council, and he also holds a certification in AI business
strategy from MIT.
James
Nicholas Kinney
Global Chief People Officer
Nationality: American
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Dear fellow shareowners,
I am pleased to present our Corporate Governance Report
for the year ended 31 December 2024, which sets out how
the Group’s governance framework supports and promotes
its long-term success and provides an overview of the
Board and its Committees.
Governance framework
We voluntarily adopted the 2018 edition of the UK Corporate
Governance Code (the Code) in July 2022 and since that
time we have remained in compliance with the majority of its
provisions, including during the year under review. In relation
to the three areas where we depart from the Code, two relate
to share schemes, which are finite in lifespan, and the last
to my own role as Executive Chairman, which is subject to
additional checks and balances. More information on our
application of the Code is available on page 58.
During the year we continued to evolve our governance,
risk and compliance frameworks and policies, unifying
them under a Global Code of Conduct, which sets out
the standards and principles for every single Monk in
the organisation, including freelancers, consultants
and contractors.
The Board sets the tone of Group’s culture, values and
behaviours, and these together with consideration of the
view of all our stakeholders, drive our decision making and
focus on the delivery of the long-term sustainable success
of the Group.
Purpose
We are a unified, purely digital business with marketing and
technology services that create transformative solutions for
our clients which capitalise on the benefits of AI. See how
we deliver this through our progress against our strategy
and business model on pages 5 and 6, and 10 to 11.
Sustainability
The year has marked significant success for the Group in
relation to our ESG efforts. The Group achieved global B
Corporation Certification, underscoring our commitment
to balancing profit with purpose and advancing our ESG
initiatives. Furthermore, we have successfully had our
Science-Based Targets initiative (SBTi) targets accredited
and approved, reinforcing our commitment to measurable
emissions reductions. The Group has also commenced its
preparation to report against other Global frameworks such
as the EU’s Corporate Sustainability Reporting Directive.
More information on our ESG strategy is available from
page 26.
Board composition and effectiveness
A number of Directors, both executive and non-executive,
stepped down from the Board at the 2024 AGM and I
thank them all for their service. I am also pleased that
the majority of the former Executive Directors remain
with the Group and serve on the Executive Committee,
and in the case of Wesley ter Haar, also a Board Observer.
The Board itself is now more representative of a typical
UK-listed company with two Executive Directors and the
remainder Non-Executive. This ensures an appropriate
balance of skills and experience, as determined by the
Nomination and Remuneration Committee with reference
to our formal skills matrix. The Committee also continues
to monitor succession planning. Further information on the
Committee’s activities can be found on pages 79 and 80.
Following the year end, Mary Basterfield announced her
intention to step down as Group Chief Financial Officer,
and at the time of writing, the search for her successor is
well underway.
The Board also conducted an internal effectiveness review
in respect of its performance in 2024. Facilitated by the
Company Secretary, the evaluation confirmed that the
Board and its Committees were considered to be effective
and identified a number of priorities and actions, which the
“The Board sets the
tone of the Group’s culture,
values and behaviours”
Sir Martin Sorrell
Executive Chairman
Executive Chairman’s statement
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Board welcomed. Further details can be found on page 72.
In 2025, an external evaluation will be undertaken.
Diversity and inclusion
Greater diversity and inclusivity, leads, in the view of the
Board, to better decision making and therefore better
outcomes for our people, clients and our business as
a whole.
Throughout the year under review and to the date of
this report, the Board has met the ethnicity-related
recommendations set out in the Parker Review. With regard
to the gender targets set out by the FTSE Women Leaders
Review, the Board plans to continue to achieve them,
whilst being mindful of Board composition. More information
on our Board diversity is available on page 67.
Stakeholder engagement
The Board recognises the importance of engaging with,
and considering the interests of, our shareowners in
promoting the Group’s long-term success.
During the year, the Board sharpened its focus on
workforce engagement, most notably with a series of
events held in conjunction with Board meetings in the US
and Singapore. With our Company’s geographical spread,
the Board is committed to sharing the responsibility of
engaging with our people amongst all our Non-Executive
Directors, rather than a single designated individual.
The Board believes that this approach is best suited to our
organisation as it provides the Board with the broadest
perspective of employee views, which each Non-Executive
Director shares with the whole Board. It also allows each
Committee Chair to engage directly in respect of matters
their Committee is responsible for. More information on our
stakeholder engagement is available from page 53.
The Company’s AGM is a key event at which the Board and
I interact with shareowners, but we encourage you to share
thoughts and views with us at any time during the year via
our Company Secretary (cosec@s4capital.com).
Conclusion
The Board and I remain committed to high standards of
governance and active dialogue with all our shareowners.
As we did last year, we will again hold a physical AGM at our
offices in early June 2025, with virtual attendance for those
shareowners who are not able to attend in person.
I would like to thank our shareowners for their continued
loyalty and support, and I look forward to seeing you at the
2025 AGM.
Sir Martin Sorrell
Executive Chairman
23 March 2025
Executive Chairman’s statement continued
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Board and senior management diversity
The information included in the below graphs has been collected by self-disclosure directly
from the individuals concerned, using a questionnaire requesting the individual to select
their gender identity and ethnicity from a list of options of equal prominence. The gender
split for all employees can be found on page 40.
The role of the Board
Diversity by gender
Diversity by ethnicity
Senior management direct reports
Board independence balance
Board
Male
56%
Female
44%
Board
White
78%
Asian/Asian
British
11%
Not specified
/prefer not
to say
11%
Gender
Male
50%
Female
50%
Board
Independent
Non-Executive
Directors
78%
Executive
Directors
22%
Senior management
Male
75%
Female
25%
Senior management
White
37%
Black/African
/Caribbean
/Black British
12%
Other ethnic
group, including
Arab
13%
Not specified
/prefer not
to say
38%
Ethnicity
White
40%
Mixed/Multiple
ethnic groups
3%
Black/African
/Caribbean
/Black British
1%
Other ethnic
group, including
Arab
11%
Not specified
/prefer not
to say
41%
Asian/Asian
British
4%
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The role of the Board continued
Board and Committee attendance
The following table shows the Directors’ attendance at
scheduled meetings they were eligible to attend for the year
ended 31 December 2024:
Board and Committee meeting attendance
Director
Board1
Audit and
Risk
Committee
Nomination and
Remuneration
Committee
Total meetings
9
6
7
Sir Martin Sorrell
9/9
–
–
Mary Basterfield
9/9
–
–
Elizabeth Buchanan2
2/9
–
–
Margaret Ma Connolly2
5/9
–
–
Wesley ter Haar2, 3
4/5
–
–
Colin Day2
8/9
6/6
2/3
Victor Knaap2, 3
4/5
–
–
Christopher S. Martin2, 3
4/5
–
–
Naoko Okumoto2, 3
2/5
–
–
Daniel Pinto2
4/9
–
–
Sue Prevezer2
6/9
2/6
6/7
Paul Roy3
5/5
2/2
4/4
Scott Spirit2, 3
4/5
–
–
Rupert Faure Walker
9/9
6/6
7/7
Miles Young2
6/9
–
2/3
Notes:
1. There were four scheduled Board meetings during the year and five ad hoc
meetings, called at shorter notice.
2. Elizabeth Buchanan, Margaret Ma Connolly, Wesley ter Haar, Colin Day,
Victor Knaap, Naoko Okumoto, Daniel Pinto, Sue Prevezer, Scott Spirit
and Miles Young were unable to attend some Board or Committee
meetings due to pre-existing arrangements which could not be changed,
primarily due to the shorter notice with which those largely ad hoc
meetings had been called. Where a Director is unable to attend a meeting,
their absence is usually notified to the Executive Chairman in advance of
the meeting, together with any comments the individual has relating to the
subjects to be discussed at the meeting.
3. Wesley ter Haar, Victor Knapp, Christopher S. Martin, Naoko Okumoto,
Paul Roy and Scott Spirit resigned as Directors on 6 June 2024.
Activities of the Board during the year
Strategy
and operations
45%
Practice reviews
9%
Financial
Performance
25%
Governance
21%
Board activities
During the year, the key Board activities were:
Financial performance
• Reviewed and approved the Group’s full year,
interim and quarterly results, and the Group’s
Budget and Three-Year Plan.
• Received regular reports from the Group
and practice Chief Financial Officers,
including results and forecasts.
• Received updates on the activities of the
Audit and Risk Committee.
Strategy and operations
• Received updates on the Monks rebranding,
internal integration and restructuring activities,
including the creation of the Marketing Services
and Technology Services practices, and external
strategy and growth.
• Received updates on the Group’s AI strategy
and the development and financial treatment of
the Monks.Flow offer.
• Oversaw successful £2.5 million share
buyback programme, funded from available
cash reserves.
• Received regular reports from the Global
Chief People Officer, the Chief Operating
Officer, Chief Growth Officer, and from
Investor Relations.
Governance and compliance
• Reviewed and approved
recommendations arising from the Board’s
performance evaluation.
• Reviewed and approved the Board role profiles,
skills matrix and composition, Committee Terms
of Reference and other key Group policies
including the Global Code of Conduct.
• Received updates on the Group’s ESG
strategies and activities, including B Corp
Certification and the Corporate Sustainability
Reporting Directive.
• Received updates from the General Counsel
and the Head of Risks on Legal, Governance
and Compliance and Risk matters, and the Chief
Information Officer on the Group’s IT systems
and roadmap.
Practice reviews
• Received updates on the performance of
each practice area (Content, Data&Digital
Media, and Technology Services) or region,
including financial performance and forecasting,
clients, strategy and operations.
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The role of the Board continued
Conflicts of interest
The Board operates a policy that restricts a Director from
voting on any matter in which they might have a personal
interest, unless the Board unanimously decides otherwise.
Prior to all major Board decisions, the Executive Chairman
requires the Directors to confirm that they do not have
a potential personal conflict with the matter being
discussed. If a conflict does arise, the Director is excluded
from discussions.
Internal measures are in place to ensure that any related party
transaction involving Directors, or their connected parties,
are conducted on an arm’s length basis. Our Directors have a
continuing duty to update any changes to these conflicts.
Purpose, values and culture
The Board, supported by its Committees, monitors the
alignment of the Company’s culture with its purpose, values
and strategy. The Company’s corporate culture is integral
to our success, we have fostered and cultivated a culture of
innovation and this feeds into how we do business. We work
continuously to enhance and evolve our culture, taking into
account the global nature of our communities.
Key central functions such as Legal, Finance and
People develop good standards of ethical behaviour and
corporate governance across the Group through our global
frameworks, policies and internal controls, which are
brought together via the Global Code of Conduct, which
sets out the standards, principles and expectations of how
the Group and its people should behave.
The Board monitors the cultural dynamics of the Group
through its workforce engagement activities, which include
site visits, employee surveys, regular ‘Need to Know’ and
‘Unmuted’ briefing sessions, as well as informal discussions
with senior executives. Miles Young has been designated
as the Non-Executive Director responsible for overseeing
culture. In this role he supports the Board in establishing
the tone from the top and fostering connections between
the Board and senior executives in setting the appropriate
culture for the Group globally.
Governance framework
The Group’s governance framework consists of the Board of Directors and its Committees. Our Committees have delegated
authority to operate within specified Terms of Reference, which are available on our website, www.s4capital.com/investors.
In addition, certain Directors, such as the Senior Independent Director, Rupert Faure Walker, or Miles Young and Margaret
Ma Connolly, designated Non-Executive Directors for overseeing culture, have specific individual responsibilities.
This framework enables the Company and its Directors to effectively discharge their duties and to comply with the UK
Corporate Governance Code.
Board of Directors
The Board has responsibility for the overall leadership of the Group, setting the Group’s purpose, values and strategy and satisfying
itself that these align with its culture, taking into consideration the views of shareowners and other key stakeholders, to promote
the long-term sustainable success of the Group. It also has responsibility for the Group’s performance and governance oversight,
including evaluating and managing principal risks through an effective internal controls environment.
Executive Committee
The Executive Committee is responsible for defining strategic proposals, implementing the Group’s strategy, and reviewing its
success, overseeing performance against the strategy, defining the budget for the Company, promoting cultural development,
and establishing and monitoring the ESG strategy for the Group.
Audit and Risk Committee
The Audit and Risk Committee ensures the governance
and integrity of financial reporting and disclosures and
reviews the controls in place. It oversees the internal
audit function and the relationship with the external
auditors, including monitoring independence, and also
reviews the effectiveness of internal controls in the Group.
The Committee also reviews and makes recommendations
to the Board on the Group’s risk appetite, risk principles and
policies so the risks are reasonable and appropriate for the
Group and can be managed and controlled within the limits
of the Group’s resources and appetite.
For more information see page 75.
Nomination and Remuneration Committee
Responsible for reviewing the balance of skills, knowledge,
experience and diversity of the Board and making
recommendations for Board and Committee appointments
and monitoring succession plans for the Board and senior
management. It is also responsible for determining the
remuneration and other benefits of Executive Directors.
Reviews and approves the Remuneration Policy,
ensuring that it is clear, simple, and aligned to culture.
Recommends and monitors overall remuneration for senior
management whilst considering employee remuneration and
alignment of incentives and rewards with culture.
For more information see page 79.
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Role of the Board
The Board is collectively responsible for the effective
oversight and the long-term success of the Company.
The Board delegates some of its responsibilities to the Audit
and Risk Committee and the Nomination and Remuneration
Committee, through agreed Terms of Reference, which are
subject to annual review and approval. The responsibilities
of each Committee are described in the governance
framework on page 69, in the Committee reports on pages
75 to 100, and are available on our website.
The Board also receives regular updates on the performance
of the Group’s businesses, operational matters and legal
updates from the Executive Chairman, the Executive
Directors and General Counsel and this provides
opportunities for Board members to provide guidance and
constructive challenge. All Board members have full access
to the Group’s advisers for seeking professional advice at
the Company’s expense.
The role of the Board continued
Division of responsibilities
The Board acknowledges that Sir Martin Sorrell’s role as Executive Chairman, effectively combining the roles of
Chairman and Chief Executive Officer, a position he has held since S4Capital’s founding, is a departure from the Code.
The Independent Non-Executive Directors met during the year to review the Board structure including consideration of
the ongoing suitability of this combined role. Sir Martin has been a leading figure in the marketing and communication
services industry for over 40 years and the Board continues to be of the view that his expertise, knowledge and global
network of relationships are a significant advantage to the Group. In light of this, the Board believes that combining the
roles of Chairman and Chief Executive continued to be appropriate during the year under review. The Board continues
to review this, including through an in-camera session held at each Board meeting with only the Non-Executive
Directors participating.
Role
Responsibility
Executive Chairman
Sir Martin Sorrell
Chairs the Board meetings, sets the Board agendas and promotes effective
relationships between Executive Directors and other senior management, and the
Non-Executive Directors.
Senior Independent Director
Rupert Faure Walker
Provides a sounding board for the Executive Chairman and is available to act as an
intermediary for other Directors when necessary. Responsible for reviewing the
effectiveness of the Executive Chairman.
Non-Executive Directors
Independent of management and assist in developing and approving the strategy.
Provide independent advice and constructive challenge to management,
bring relevant experience and knowledge and serve on the Board Committees.
General Counsel, Head of Compliance
and Company Secretary
Caroline Kowall
Advises the Board on matters of corporate governance and ensures that the
correct Board procedures are followed. All members of the Board and Committees
have access to the services and support of the Company Secretary.
Further information on our Board roles and responsibilities are available on our website, www.s4capital.com/investors.
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Directors’ performance
During the year, the Executive Chairman held meetings
with individual Directors at which, among other things,
their individual performance was discussed. Informed by
the Executive Chairman’s ongoing observation of individual
Directors during the year, these discussions form part of
the basis for recommending the election and re-election of
Directors at the Company’s AGM, and includes consideration
of the Director’s performance and contribution to the Board
and its Committees, their time commitment and the Board’s
overall composition.
Executive Chairman’s performance
Rupert Faure Walker in his capacity as the Senior
Independent Director, leads the annual performance
review of the Executive Chairman. This involved meetings
during the year with the Independent Non-Executive
Directors, without the Executive Chairman being present.
The Senior Independent Director provided feedback to the
Executive Chairman.
Election and re-election of Directors at the
2025 AGM
In accordance with the Company’s Articles of Association
and the UK Corporate Governance Code, all Directors will
resign at the 2025 AGM, and with the exception of Mary
Basterfield, offer themselves for re-election. The Board
has confirmed that each Director standing for re-election
continues to be effective and demonstrates commitment
to their role. On the recommendation of the Nomination
and Remuneration Committee, the Board will therefore
be recommending that shareowners vote in favour of
the resolutions proposing the election or re-election
(as applicable) of each Director standing for election or
re‑election at the 2025 AGM.
B Shareowner
As the founder of the Group, Sir Martin Sorrell has
been issued with a B Share which provides him with
enhanced rights.
As the owner of the B Share, Sir Martin has the right to:
• appoint one Director of the Company from time to time
and remove or replace such Director from time to time;
• ensure no executives within the Group are appointed or
removed without his consent;
• ensure no shareowner resolutions are proposed (save as
required by law) or passed without his consent; and
• save as required by law, ensure no acquisition or disposal
by the Company or any of its subsidiaries of an asset
with a market or book value in excess of £100,000 (or
such higher amount as Sir Martin may agree) may occur
without his consent.
The B Share will lose the B Share rights if it is transferred by
Sir Martin and also:
(i) in any event after 14 years from 28 September 2018
(being the date on which the B Share was issued), or,
if earlier, the date on which Sir Martin retires or dies; or
(ii) if Sir Martin sells any of the Ordinary Shares that he
acquired on 28 September 2018 (other than in order to pay
tax arising in connection with his holding of such shares).
In order to ensure that Sir Martin’s exercise of the rights
attaching to the B Shares do not prejudice the Company’s
ability to comply with the UK Listing Rules, Sir Martin and
the Company have entered into a relationship agreement.
Pursuant to this relationship agreement, Sir Martin has
undertaken to ensure that:
• transactions and arrangements with Sir Martin (and/or
any of his associates) will be conducted at arm’s length
and on normal commercial terms;
• neither Sir Martin nor any of his associates will take
any action that would have the effect of preventing the
Company from complying with its obligations under the
Listing Rules; and
• neither Sir Martin nor any of his associates will propose or
procure the proposal of a shareowner resolution, which is
intended or appears to be intended to circumvent the
proper application of the Listing Rules.
The Group has policies in place to ensure that the rights
attaching to the B Share are not infringed.
Board evaluation
During the year an internal Board effectiveness review was
conducted. Working with the Nomination and Remuneration
Committee, the Company Secretary distributed a structured
online questionnaire seeking input on a number of topics
including meeting administration, Board composition,
accountability and standards of conduct.
The results were then analysed and discussed at a Board
meeting after the year end, and proposed actions to
enhance the effectiveness of the Board. The meeting also
reviewed the findings of the previous year’s evaluation to
analyse the effectiveness of the improvements put in place
to address the findings of that review.
The role of the Board continued
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Topic
Recommendation
Progress/Plan of action
Meeting administration,
Board agenda and focus
To ensure meeting materials and
minutes are distributed in a more
timely manner.
An improved written procedure, with accompanying
deadlines, has been drafted and agreed with key internal
stakeholders relating to the drafting, review and publication
of meeting material and minutes, which are distributed
electronically via a secure software solution.
Agenda to be more focused on
decision making and strategic
oversight, with more succinct and
analytical papers, to promote
better discussion.
An updated paper template has been developed to present
information in a consistent manner, highlighting the action
required. Operational matters to be discussed more
thoroughly at the preceding Executive Committee meeting
to ensure greater management alignment.
Strategy, culture
and values
To hold an annual Board strategy,
culture and values session,
separate from the quarterly
meeting cycle.
Offsite culture and values session held by Miles Young with
certain NEDs and senior management in Q1, with a further
report to the Board in Q2 and discussion thereon.
The role of the Board continued
The evaluation’s conclusions
The internal evaluation concluded that the Board provides
strong leadership of the Company’s values, mission and
strategic and business plans, being well governed with
appropriately structured Committees and strongly
cognisant of shareowner value. The Board felt it had
good access to management and was empowered to
ask appropriate questions and challenge constructively
as necessary.
The review concluded that whilst the Board was operating
effectively, there was scope for further improvement,
and made the following recommendations.
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How we engage with our people
Our diverse and dedicated people underpin the success of our business. The Board uses a combination of both informal and formal engagement channels as detailed below:
How we
engage with
our people
Non-Executive Director engagement
All of our Non-Executive Directors share the responsibility
for workforce engagement, which can include attendance at
Community Group sessions (described below) or ‘Need to Know’
All-Hands sessions on specific topics. In addition, informal briefing
sessions with regional and local management, and local office
staff have taken place in conjunction with each overseas Board
meeting. Non‑Executive Directors report to the Board following
any engagement activity with the workforce.
Employee surveys
We conduct periodic employee surveys and use this feedback
to improve our performance and culture.
All-Hands
We host All-Hands sessions, divided into departmental
All-Hands and geographical All-Hands sessions. These sessions
include a question and answer segment, providing two-way
communication and further engagement.
State of our One Nation
The Executive Chairman sends out a weekly email update to
all our people to ensure that they are kept informed of global events,
industry developments, business activities, key highlights and Group
and/or departmental milestones.
Community groups
Championed by our Global Chief People Officer and managed
by our local People team, these voluntary employee-led groups aim
to foster a diverse and inclusive workplace. Current groups include
Pride.Monks, Enable.Monks, Melanin.Monks, Cultura.Monks,
Caregiver.Monks, APINH.Monks and WoMMen in Tech. These groups
operate at a global and local level fostering cultural recognition and
continuous learning of its members and our organisation as a whole.
Speak Up
Our Speak Up system allows for an anonymous reporting line for
our people to raise any concerns, in addition to non-anonymous ways
through HR managers and the General Counsel. The Board, through
the Audit and Risk Committee, receive regular updates.
The role of the Board continued
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The role of the Board continued
How we engage with our shareowners
Our main engagement methods are listed below:
Annual Report and Accounts
Our Annual Report and Accounts are available to all shareowners,
and we aim to make our Annual Report and Accounts as accessible as
possible. Shareowners can opt to receive a hard copy in the post, or PDF
copies via email or from our website. Shareowners can also contact our
Company Secretary to request a copy via cosec@s4capital.com.
Annual General Meeting
The AGM provides an opportunity for our shareowners to question
the Directors and the Chairs of each of the Board Committees.
Information on the 2025 AGM is on page 103.
Corporate website
Our website is regularly updated and has a dedicated investor section
which includes all our Annual Report and Accounts, our results
presentations and contact details.
Shareowners consultation
When considering material changes to our Board, strategy or our
remuneration policies, we will always seek to engage with shareowners.
Investor meetings
The Executive Chairman, together with the Group Chief Financial Officer
and Chief Growth Officer meet with the Company’s largest institutional
shareowners to hear their views and discuss any issues or concerns.
During the year the Executive Chairman, Group Chief Financial Officer and Chief
Growth Officer held over 200 investor meetings, in person and virtually.
Following the announcement of our results, the Company’s largest shareowners,
together with financial analysts, are invited to a presentation with a question and
answer session by the Executive Chairman, Group Chief Financial Officer and Chief
Growth Officer. The webcasts are made available to all shareowners via the website.
Senior Independent Director
Should shareowners have any concerns, which the normal channels
of communication to the Executive Chairman or Group Chief Financial
Officer have failed to resolve, or for which contact is inappropriate,
then our Senior Independent Director, Rupert Faure Walker, is available
to address them. Rupert can be contacted via the General Counsel and
Company Secretary (cosec@s4capital.com).
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Audit and Risk Committee Report
Letter from the Chair
Committee membership
Colin Day: Chair
Sue Prevezer KC
Rupert Faure Walker
Paul Roy (until 6 June 2024)
Dear shareowners,
As Chair, I present my report on the activities of the Audit
and Risk Committee for the year ended 31 December 2024.
The Committee has been established by the Board primarily
for the purpose of overseeing the accounting, financial
reporting, internal controls and risk management processes
and the audit of the financial statements of the Group.
The Committee’s role and responsibilities are set out in
the Committee’s Terms of Reference which are available
on our website, www.s4capital.com/investors and are
reviewed annually.
The Committee plays a key role in assisting the Board in its
oversight of the quality and integrity of the Group’s external
financial reporting and accounting policies and practices for
the benefit of its shareowners and other key stakeholders.
During the year, the Committee has overseen the ongoing
transformation of the finance function, with projects such
as the consolidation of ERP systems, which commenced
in the previous year and has continued apace, and the
ongoing improvements being made to our forecasting.
It has also played an active role in the Group’s planning for
new reporting obligations including those required by the
2024 version of the UK Corporate Governance Code in
respect of risk and internal controls, and the UK’s Economic
Crime and Corporate Transparency Act.
Personally, I have continued visiting key finance locations in
APAC, EMEA and LATAM to connect with local management
and finance staff, and to report back to my fellow
Committee members.
We were also pleased to oversee in-sourcing of the Internal
Audit function with the appointment of a Head of Internal
Audit, who has built a team around him. On behalf of the
Committee, I wish to thank the external Internal Auditor,
Deloitte LLP, for the assistance rendered to the Committee
since their appointment in mid-2022.
Significant issues considered by the
Committee during the year
In discharging its duties by reviewing the financial
accounts of the Company and the auditor’s report, the
Committee considered and discussed the following key
financial matters:
• Impairment review: The Committee reviewed
management’s approach to, and recommendations
in respect of, the annual impairment review. This was
performed at the three cash generating units (‘CGUs’)
as well as on the Company’s investment in subsidiary,
and the Committee concluded that it was necessary
to recognise impairments in two of the CGUs and the
Company’s investment in subsidiary.
• Revenue recognition: The Committee oversaw internal
audit reports and management responses into revenue
recognition in all three practices. Due to the complexity
of the contracts, particularly in Content, management’s
judgment is key and the Committee was generally
satisfied with the approach taken.
• Taxation: During the year, the Committee assessed
the reasonableness of provisions for taxation and
the approach taken in respect of BEAT and Pillar 2.
The Committee reviewed the appropriateness of the
disclosures in the Annual Report, and the Board reviewed
and approved the Group’s tax strategy statement,
which is available on the Company’s website at
www.s4capital.com.
• Deferred taxation: the Committee reviewed the deferred
tax position relating to business combinations and the
restatement of comparative financial statements to
account for the recognition of deferred tax balances
related to certain business combinations.
“The Committee has overseen
the ongoing transformation of
the finance function, which has
continued apace”
Colin Day
Chair, Audit and Risk Committee
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Audit and Risk Committee activities in 2024
The main areas of the Committee activities during 2024
financial year included:
Financial and narrative reporting
• The material areas in which significant/key judgements
were applied, based on reports from both the Group’s
management and the external auditor.
• The information, and underlying assumptions presented
in support of the impairment, going concern and
viability assessment.
• The consistency and appropriateness of the financial
control and reporting environment.
Internal control and risk management
• Reviewed the effectiveness of the Company’s systems of
risk management and internal controls, together with the
Enterprise Risk Management Framework.
• Performed a review of the Company’s principal
and emerging risks and uncertainties, risk appetite
statements, risk owners and risk response plans.
• Agreed the plan to comply with the 2024 Corporate
Governance Code by creating an updated material
control set required by the updated Code.
• Received updates on information security, information
governance, data privacy and the Group’s IT infrastructure.
Compliance, whistleblowing and fraud
• Reviewed reports arising from the Speak Up Line.
• Evaluated management’s identification of fraud risk and
its implementation of anti-fraud measures, aligned to the
Global Code of Conduct.
Internal audit
• Approved the appointment of a Head of Internal Audit
and creation of an in-house internal audit team.
• Approved the annual internal audit plan.
• Reviewed key themes and findings from the internal
audit reviews and tracked follow-up actions from
previous reviews.
External auditor
• Reviewed the scope of, and findings from, the external
audit undertaken by PricewaterhouseCoopers LLP (PwC)
as the external auditor.
• Assessment of the performance, continued objectivity
and independence of, and fees charged by, PwC.
Key focus for 2025
Alongside the regular cycle of matters that the Committee
schedules for consideration each year, we are planning over
the next 12 months to focus on the following areas:
• supporting the in-housed Internal Audit function
to conduct risk-based audits in material areas of
the business;
• the continuing transformation of the finance function,
including systems consolidation and process
improvements; and
• the enhancements required to the Material Controls
Framework to meet the Group’s obligations under the
2024 UK Corporate Governance Code and Economic
Crime and Corporate Transparency Act.
Internal audit
The Committee is responsible for monitoring and reviewing
the operation and effectiveness of the Group’s Internal
Audit function, including its independence, strategic focus,
activities, plans and resources. During the year this function
was brought in-house with the appointment of a Head
of Internal Audit, who has built a team to undertake the
assurance relating to the adequacy and effectiveness of
the Group’s internal controls and risk management systems
that was formerly carried out by Deloitte LLP.
The Group’s internal audit plan is prepared in accordance
with standards promoted by the Chartered Institute of
Internal Auditors. The Committee meets regularly with the
Head of Internal Audit to review progress against the plan.
The Committee is satisfied that the Internal Audit function
has the necessary integrity, objectivity and competency to
fulfil its mandate. It has also satisfied itself that the Internal
Audit function has adequate standing and is free from
management or other restrictions.
External audit
The Committee has primary responsibility for overseeing
the relationship with, and performance of, the external
auditor, PwC. This includes making recommendations to
the Board concerning the appointment, reappointment and
removal of the external auditor, as well as assessing its
independence on an ongoing basis.
PwC has served as external auditor since 2018. The current
lead audit partner, Jason Burkitt, has been in position since
January 2023.
During the year, the Committee reviewed the external
auditor’s performance and concluded that the external
auditor remains independent, objective and effective in its
role and should be re-appointed for a further year. On the
recommendation of the Committee, the Board is therefore
putting forward a resolution at this year’s AGM to re-appoint
PwC as external auditor for a further year.
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The Committee’s policy is that the external auditors should
not undertake any work outside the scope of their annual
audit and the review of the interim financial statements.
The Committee has discretion to grant exceptions to this
policy where it considers that exceptional circumstances
exist and that independence can be maintained,
whilst having due regard to the FRC’s Revised Ethical
Standard 2024. The Committee’s approval is required
to instruct PwC to perform non-audit services.
The Committee confirms that in respect of The Statutory
Audit Services for Large Companies Market Investigation
(Mandatory Use of Competitive Tender Processes and Audit
Committee Responsibilities) Order 2014, the Group has
complied with the applicable provisions for the financial
year under review.
Fees
The audit related fees for the year ended 31 December
2024 amounted to £4.0 million (2023: £4.0 million).
The non-audit fees for the year ended 31 December
2024 amounted to £0.5 million (2023: £0.4 million).
Further information is available on page 135.
Fair, balanced and understandable
At the request of the Board, the Committee considered
whether, in its opinion, the 2024 Annual Report, taken as
a whole, is fair, balanced and understandable. In its review,
the Committee examined the preparation and review
process and considered the continuing appropriateness
of the accounting policies, important financial reporting
judgments and the adequacy and appropriateness of
disclosures. Board and Committee members received
drafts of the Annual Report for their review and input which
provided an opportunity to discuss the drafts with both
management and the external auditor.
Following its review and the Committee’s recommendation,
the Board believes that the 2024 Annual Report and
Accounts is representative of the year and, taken as a
whole, is fair, balanced and understandable and provides the
information necessary for shareowners to assess the Group’s
position, performance, business model and strategy.
Going concern and long-term viability
The Committee considered the going concern position as
detailed on page 119. Having reviewed and challenged the
downside assumptions, forecasts and mitigation strategy
of management, the Committee believe that the Group and
Company are adequately placed to manage its business
and financing risks.
The Directors have a reasonable expectation that
the Group and Company have adequate resources to
continue in operational existence for a period longer
than 12 months from the date of signing the financial
statements. Therefore, the Directors continue to adopt the
going concern basis in preparing the financial statements.
The Directors, having considered the longer-term viability
assessment as detailed on page 23, confirm that they have
a reasonable expectation that the Group and Company will
be able to continue in operation and meet its liabilities as
they fall due and over the viability period to 2027.
Risk Management
The Board has overall responsibility for setting the Group’s
risk appetite and ensuring that there is an effective risk
management and internal controls framework in place,
and has delegated the responsibility for review of the risk
management methodology and effectiveness of internal
controls to the Audit and Risk Committee. The Group’s
Enterprise Risk Management (ERM) framework is used
to inform the Board of the key risks across the global
organisation, using both a ‘top down’ and ‘bottom up’
approach to provide a holistic view of the key operational,
financial, commercial, and strategic risks facing the business.
Both the Audit and Risk Committee and Board have reviewed
and approved the Group’s principal risks, which are detailed
on pages 19 to 22. In addition, each principal risk has a senior
leader owning it, who is also responsible for documenting the
corresponding risk response plan, which is submitted to the
Head of Risks for review and monitoring.
Internal Controls
Financial reporting is governed by a global finance manual
and group minimum financial controls, to ensure consistency
of record keeping and consolidation. Results and forecasts
are consolidated centrally by the group finance team
on a monthly basis and reviewed by the Group Financial
Controller and presented to senior leadership for review and
discussion. Each business unit is required to self-certify its
compliance with the minimum financial controls on an annual
basis, and Internal Audit will also perform risk-based audits
throughout the year and report findings to the Audit and
Risk Committee.
Speak Up
The Committee oversees the Group’s Speak Up Policy and
procedures. Concerns can be raised by employees with
managers, HR or the General Counsel or can be reported
by anyone, anonymously, if necessary, to a confidential
hotline. The Committee received regular reports on matters
raised. In 2024, a total of 41 cases were reported through
the programme, over 98% of which were HR-related.
Each issue was investigated under our standard investigation
procedures and appropriate steps were taken ranging from
action against specific individuals to formalising local or
global policies. No material issues were identified.
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Membership of the Committee and
attendance at meetings
The Committee is comprised solely of independent Non-
Executive Directors with a wide range of experience.
As the Chair of the Committee, I am considered by the
Board to have recent and relevant financial experience.
My biographical details and those of my fellow
Committee members can be found on pages 60 to 63.
Meeting attendance of the Committee members can
be found on page 68. The Board is satisfied that the
Committee has the resources and expertise to fulfil its
responsibilities. By invitation, the Executive Chairman,
Group Chief Financial Officer, Head of Internal Audit,
Group Financial Controller, General Counsel and Company
Secretary, Deputy Company Secretary and representatives
from the internal auditors (Deloitte, whilst in post) and
external auditors (PwC) attend Committee meetings.
The Committee met six times during the year. To further
facilitate open dialogue and assurance, the Committee
holds private sessions with the internal and external
auditors without members of management being present.
Committee effectiveness
An evaluation of the effectiveness of the Board and its
Committees was undertaken just after the year end, in line
with the requirements of the UK Corporate Governance
Code. The results confirmed that the Committee is
operating effectively. The Committee considered that
during the year it continued to have access to sufficient
resources to enable it to carry out its duties and has
continued to perform effectively. Further information on the
Board effectiveness review is available on page 71 and 72.
As Chair of the Audit and Risk Committee, I am available to
shareowners and stakeholders should they wish to discuss
any matters within this report or under the Committee’s
area of responsibility generally, whether at the AGM or by
writing to the General Counsel and Company Secretary at
cosec@s4capital.com.
Colin Day
Chair, Audit and Risk Committee
23 March 2025
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“The Committee remains very
conscious of the competitiveness
of global talent markets and the
challenges this presents”
Sue Prevezer KC
Chair, Nomination and Remuneration Committee
Letter from the Chair
Committee membership
Sue Prevezer KC: Chair
Colin Day (from 6 June 2024)
Paul Roy (until 6 June 2024)
Rupert Faure Walker
Miles Young (from 6 June 2024)
Dear shareowners,
As the new Chair of the Nomination and Remuneration
Committee, I am pleased to present my report on the
Committee’s activities for the financial year ended
31 December 2024. I am also extremely grateful to my
predecessor, Paul Roy, who retired from the Board at
the AGM in June 2024. At the same time as Paul retired,
Colin Day and Miles Young joined the Committee, so it now
comprises Rupert Faure Walker, Colin Day, Miles Young
and I, all of whom are considered by the Board to be
independent Non-Executive Directors.
Board composition and succession planning
2024 saw considerable changes to the size and
composition of the Board, with several Executive and
Non‑Executive Directors stepping down at the AGM. As a
result, we have a smaller Board with only two Executive
Directors and the remainder Non-Executive, which is more
typical of UK-listed companies, but we also retain our
founder ownership representation in the form of Wesley
ter Haar’s position as Board Observer.
Aside from changes to Committee compositions following
Paul Roy’s retirement, succession planning has mainly
been focussed at the Executive Committee level, and has
included the appointment of Jean-Benoit Berty as Chief
Operating Officer. In respect of Board composition and
succession planning, the Committee monitors both with
reference to an agreed skills matrix, which analyses each
director’s areas of expertise versus those required for the
successful execution of the Company’s strategy.
Board diversity
Diversity, as articulated in the Board’s Diversity Policy is
broader than just that of gender and ethnicity, and remains
a priority for the Committee and the Board as a whole.
In application of the stated aims of the Policy during the
year, there are currently four women on the Board out
of a total of nine Directors (44% female representation).
We currently comply with the recommendations of the
FTSE Women Leaders Review that women hold at least
40% of Board positions, and that at least one senior
Board position (being the Chair, Chief Executive Officer,
Chief Financial Officer or Senior Independent Director)
is held by a woman. As announced on 9 January 2025,
Mary Basterfield, our Group Chief Financial Officer, will be
leaving the Company and we are actively considering the
impact of this Board change on our diversity position.
During 2024, and as at the date of this report, the Board
met the recommendation to have at least one Director
from an ethnic minority on the Board. Further details of
our Board Diversity Policy are available on our website,
www.s4capital.com. Information on the Company’s
Diversity, Equity and Inclusion (DE&I) Policy and the
diversity of the workforce as a whole are set out in the ESG
section of the Strategic Report from page 26. In addition,
on page 67 we include details of the gender and ethnic
balance across the Board and senior management.
Directors’ remuneration in 2024
During 2024 the business again experienced challenging
trading conditions reflecting the global macroeconomic
conditions and clients’ caution and fears of recession and
conflicts. This resulted in a difficult year for new business,
longer sales cycles, particularly for larger transformation
projects, and whilst all practices saw some impact,
this was felt most strongly with our technology clients.
Throughout this difficult period, the management team
has demonstrated significant drive and leadership and a
commitment to regaining the confidence of the market.
This has formed the context for the decisions taken by the
Committee during the course of the year. The Committee
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remains very conscious of the competitiveness of global
talent markets and the challenges this presents in recruiting
and retaining senior leaders. We continue to encourage
an approach to executive compensation which allows
UK-listed companies to be competitive against peers in
other markets.
The overall structure of remuneration for the Executive
Directors in 2024 was consistent with the Remuneration
Policy approved at the 2022 AGM. The only basic
salary increase for the year was for Mary Basterfield,
whose salary increased to £450,000 per annum with
effect from 1 October 2024. This increase was agreed by
the Committee following a review of Mary’s contribution,
performance and the extensive scope of her role.
This was informed by a review of relevant market data,
focusing on pay levels for CFOs at companies of a similar
size to S4Capital in terms of revenue, and also taking into
account the international scope of the business and the
need to remain competitive. We recognise that the increase
was significant in percentage terms, but believe it was
appropriate for the reasons set out above.
We considered whether long-term share incentives should
be granted to the Executive Directors in 2024, ultimately
concluding not to grant such awards to Directors during the
year. Awards were instead made to senior executive leaders
below Board level, in the interests of the competitiveness
of their compensation packages and to ensure ongoing
alignment with shareowner interests.
During 2024 Sir Martin Sorrell and Scott Spirit (a former
Executive Director) continued to participate in the separate
Incentive Share Scheme which was established at the
time of S4Capital’s creation in 2018 and which rewards
the growth in value of the invested capital in S4Capital
2 Limited. At 31 December 2024, the minimum growth
condition for this scheme had not been met and therefore
awards are not yet capable of being exercised.
Each Executive Director participated in the annual
cash bonus scheme for 2024, with payments based on
performance against both financial and non-financial
measures. The financial measures (70%) consisted
of net revenue growth, EBITDA margin and EBITDA to
cash conversion. For the non-financial measures (30%),
targets were linked to ESG performance, DE&I, ongoing
business integration and a new measure focusing on the
increased usage of AI within the business. The targets are
set out on page 92.
After the year end, the Committee reviewed performance
against the targets set. Both financial and non-financial
targets were partially met, with 45% and 17.5%
achievement respectively, leading to a total bonus
outcome of 62.5% of the maximum. However, mindful of
the Company’s overall financial results for the year,
the Committee chose to exercise downwards discretion
and override this formulaic calculation, determining that a
bonus achievement of 37% would be paid to the Directors
for the year.
As previously disclosed, Mary Basterfield participates
in certain equity arrangements agreed at the time of her
recruitment in late 2021. During the year under review,
she was granted the third of four separate annual awards
to be made over the first four years of her employment.
The award had a face value of £500,000, equivalent to
130% of her salary at the time, and was granted half as
an award of market-priced share options and half as a
conditional share award. Prior to the grant of the award
in March 2024, the Committee determined that the
performance targets for this award should align with the
financial and non-financial targets set for the 2024 annual
bonus scheme. In line with the outcome for the annual
bonus scheme, as set out above, the formulaic performance
assessment was 62.5%. The Committee further agreed
that, consistent with the annual bonus, the performance
outcome for this equity award would be reduced to 37%.
As noted, four executive directors stepped down from the
Board at the 2024 AGM. No payments for loss of office
were made to these Directors.
All decisions taken during 2024 were consistent with
the Directors’ Remuneration Policy and the Committee
therefore considered that the Policy operated as intended
during the year. The Policy provides the Committee with
appropriate flexibility to make the right decisions in the
best interests of the business and of shareowners. This was
evidenced by the decisions reached in respect of 2024.
Remuneration plans for 2025
As noted below, we will be asking shareowners to approve
a new Policy at the AGM in June.
Any Executive Director salary increase for 2025 will
be consistent with the principles set out in the Policy.
Full disclosure of any changes will be provided in next
year’s Directors’ Remuneration Report at the latest. For the
avoidance of doubt, no further salary increase will be
awarded to Mary Basterfield in 2025. Pension and benefits
provision to the Executive Directors will remain unchanged.
We are in the process of recruiting a new Group Chief
Financial Officer. The salary package and other aspects
of his or her compensation will be consistent with the
Directors’ Remuneration Policy.
Under the annual bonus scheme, Executive Directors
will continue to have the opportunity to earn up to
100% of salary as a bonus, subject to the satisfaction of
performance conditions linked to strategically important
key financial and non-financial measures. 75% of the
bonus will again be payable by reference to performance
measured against financial metrics, including net
revenue, EBITDA, EBITDA margin and EBITDA to cash
conversion. These metrics all align with our focus on
improving profitability against the backdrop of ongoing
macro challenges. The remaining 25% of the bonus will
be payable by reference to key non-financial objectives.
This includes ESG performance, DE&I, measures linked to
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integration and increase in usage of AI. The AI measure was
introduced in 2024 as being key to the ongoing success of
the business and central to our long-term growth prospects.
The exact targets for the annual bonus scheme are currently
considered commercially confidential, but as normal will
be disclosed in full in next year’s Directors’ Remuneration
Report alongside a discussion of the level of performance
achieved. Mary Basterfield’s annual bonus for 2025 will be
pro-rated to reflect the period of the financial year served.
Mary Basterfield will receive her final award of shares
in 2025 with a face value at grant of £500,000. This will
again be split equally between market-priced options
and conditional shares. The award will be subject to the
satisfaction of targets which will mirror those for the annual
bonus scheme.
The targets are considered commercially confidential and
will be disclosed in next year’s Directors’ Remuneration
Report. To the extent that the performance targets are
satisfied, the award will vest on a pro-rata basis in August
2026, this being four years after the grant of the first award
under these arrangements.
At this stage the Committee has not made any final
decisions regarding the potential grant of long-term
incentive awards to the Executive Directors in 2025.
Any awards will be consistent with the terms of the
Directors’ Remuneration Policy, with full details provided
in next year’s Remuneration Report.
The Board (excluding the Non-Executive Directors) is
responsible for determining Non-Executive Director fees.
During 2024 the Board reviewed the fee levels, taking
into account the time commitment and contribution of the
Non-Executive Directors, and the significant gap between
the fees and market rates for Directors at similarly-sized
companies. As a result, certain increases were agreed.
With effect from 1 July 2024 the Non-Executive Directors
receive a base fee of £50,000, with an additional fee of
£10,000 paid to the Senior Independent Director and the
Chair of the Nomination and Remuneration Committee,
and an additional £12,500 paid to the Chair of the Audit
and Risk Committee.
Group Chief Financial Officer departure
arrangements
The exact departure arrangements for Mary Basterfield
are being finalised. Full details will be disclosed at the
appropriate time.
Review of Directors’ Remuneration Policy
The Directors’ Remuneration Policy was last approved by
shareowners at the AGM in 2022 and therefore will be
subject to renewal at this year’s AGM. During 2024 and
early 2025, the Committee undertook an extensive review
of the Policy to determine what, if any, changes were
required to ensure its ongoing suitability for the Company.
We considered the current state of the business, the
opportunities for the coming years (including AI), the need
to attract and retain top executive talent, common market
practice and the views of major investors and relevant
representative bodies.
Our overall conclusion was that the Policy has to date
provided an appropriate framework for rewarding the
Executive Directors, so the Policy presented for shareowner
approval at the forthcoming AGM is similar to that approved
in 2022. We have made only limited changes and a number
of minor amendments to ensure we retain an appropriate
level of flexibility while bringing some elements further into
line with market practice.
Equity ownership is an integral part of the Policy.
Cash remuneration is pitched at market-appropriate levels,
with salaries for the Executive Directors supplemented with
a cash bonus opportunity. The new Policy increases the
cash bonus opportunity to a maximum of 150% of salary,
which is considered to be aligned with bonus limits at
other UK-listed companies with similar levels of revenue to
S4Capital, and will give us additional flexibility to provide a
competitive market package for the Executive Directors is
required over the three-year Policy period. Further, for any
Director who has not met their shareholding requirement
of 200% of basic salary, any bonus in excess of 100%
of salary must be deferred into shares and subject to a
minimum two-year holding period.
This 150% limit is being added at this stage for flexibility
only: the annual bonus limit for the Executive Chairman
and the Group CFO will remain at 100% of salary for 2025.
The Policy also includes the Incentive Share scheme,
in which one executive director participates. The operation
of this scheme is explained further on page 96. The changes
we have made to the Policy are set out on page 84.
The Committee believes that the new Policy provides an
appropriate framework for Directors’ remuneration over the
next three year period.
UK Corporate Governance Code
The Committee follows the UK Corporate Governance
Code and remains confident that the overall approach
to remuneration is aligned to both the 2018 and 2024
iterations of the Code (against which we will be required
to report from 1 January 2025), and that we continue to
comply with the vast majority of the provisions relating to
Directors’ remuneration.
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The overall Directors’ Remuneration Policy and the way it
is implemented is aligned with the strategy of the business
and the promotion of long-term sustainable success.
As a business, we seek to generate value by using our
technology and data to create exceptional content,
distributed by digital media. The success of this approach is
to a significant extent measured by financial performance.
A key component of the incentive schemes is rewarding
the achievement of challenging targets based on financial
measures which include EBITDA to cash conversion, net
revenue and EBITDA margin, indicators of the success of
our strategic objectives and measures which are closely
tracked internally and by S4Capital’s shareowners and
market analysts. This is supplemented by a focus on non-
financial measures which are critical to the long-term value
of the business and aligned with our ESG strategy, such as
ensuring that the Company has an appropriately diverse
workforce and is managing its wider responsibilities to
society. The long-term incentive plan put in place in 2023
has a focus on share price performance, this being critical
to the business at a time when the valuation has been
suppressed. The ultimate value of the separate Incentive
Share scheme to participants is closely correlated with
the long-term success of the business since its foundation
in 2018 and incorporates an extended vesting period,
consistent with the expectations of the Code.
The Committee has sought to ensure that the Directors’
Remuneration Policy and its implementation are consistent
with the factors set out in Provision 40 of the 2018 Code:
• Clarity: Remuneration arrangements for the Executive
Directors are set out transparently in this report,
allowing shareowners to understand the nature of the
specific incentive schemes and payments under those
schemes. We remain committed to engagement with
our major shareowners and the wider workforce on
remuneration matters.
• Simplicity: The structure of the Remuneration Policy for
the Executive Directors is simple and straightforward.
Both Executive Directors participate in the annual bonus
scheme, with additional equity awards offered when
considered appropriate. All long-term incentives have
a relatively simple structure.
• Risk: The Committee is aware that the Incentive Share
scheme may theoretically result in the issue of shares to
participants of a significant value. However, such awards
will be consistent with the creation of shareowner
value since the foundation of S4Capital and therefore
very clearly tied to the performance of the business.
Any reputational risk triggered by a perception of
excessive rewards which are divorced from the underlying
performance of the business is therefore limited.
• Predictability: Rewards available to Executive Directors
under their fixed remuneration arrangements and the
annual bonus scheme are limited in scope and reasonably
predictable in value. The value of the various equity
awards will vary in value depending on the achievement
of the performance conditions and the share price as at
the date of vesting/exercise, but will ultimately correlate
with growth in shareowner value.
• Proportionality: The annual bonus scheme, the long-term
incentive plan, the Incentive Share scheme and the equity
awards to the Group Chief Financial Officer tie individual
reward closely to the performance of the business.
The targets for the bonus scheme and the Group Chief
Financial Officer ’s awards are linked to core financial
priorities and key non-financial objectives. The Incentive
Share scheme and the long-term incentive plan reward
the generation of value for shareowners. As such,
payouts under these schemes will be reflective of the
success or otherwise of the strategic direction which
has been set for the Group.
• Alignment to culture: S4Capital is continuing to build a
new age/new era, digital, data-driven, unitary business.
Our incentive schemes for Directors and for employees
across the Group more widely are aligned and are all
designed to ensure that performance is rewarded which
supports overall business goals and is consistent with
the purpose and culture of the Group.
There are two areas where we do not fully comply with the
remuneration-related elements of the Code:
• Provision 36: The Group Chief Financial Officer’s equity
awards agreed as part of her recruitment in 2021 do not
have a total vesting and holding period of five years or
more. The full rationale for the structure of these awards
was set out in the Directors’ Remuneration Report for the
year ended 31 December 2021. The Committee believes
they were appropriate for S4Capital in the context of the
need to offer a competitive recruitment package which
is aligned to the interests of the business. The equity
awards granted to certain Executive Directors as part of
the new long-term incentive arrangements in 2023 have
a three-year vesting period and a separate two-year post-
vesting holding period.
• Provision 37: The Incentive Share scheme does not
include malus or clawback provisions, nor does the
Committee have the ability to override the formulaic
outcome of the scheme. This is due to the long-term
nature of the plan and the fact that participants in the
scheme can only receive benefits once shareowners
have experienced significant growth in the value of their
investment. In line with the Code, the other incentives in
place for Directors (the annual bonus scheme, the equity
incentives for the Group Chief Financial Officer and
the more recent long-term incentive awards) include
malus and clawback provisions and provisions which
give the Committee the ability to override the formulaic
outcome of the performance tests if deemed appropriate.
Similar arrangements will apply to any new long-term
incentive offered to the Executive Directors in the future.
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Nomination and Remuneration Committee Report continued
As noted earlier in this report, the Committee has developed
its new Remuneration Policy in conjunction with the 2024
iteration of the UK Corporate Governance Code and is
confident that the new Policy is aligned to the latest iteration
of the Code in the same way as the previous Remuneration
Policy is aligned to the 2018 Code.
Discretion
The Committee oversees the application of discretion in
accordance with the Remuneration Policy. No discretion
was exercised during the year, however, after the year
end, and as explained above, the Committee exercised
discretion to reduce the cash bonus outcome and the
performance outcome for the Group Chief Financial
Officer’s 2024 equity award from 62.5% to 37%.
Committee engagement
The Committee welcomes the engagement of shareowners
and is committed to maintaining an open dialogue
regarding any nomination or remuneration-related matters.
The Committee continued to reflect on and consider
shareowner views on remuneration when implementing
the Directors’ Remuneration Policy throughout 2024.
In May 2024, my predecessor Paul Roy wrote to major
shareowners to provide further context to two resolutions
being proposed at the AGM which related to the Committee’s
responsibilities for remuneration and nomination, and we
were pleased to note that the relevant resolutions received
over 90% votes in favour, indicating a good level of support
for our overall approach.
In early 2025 I wrote to major shareowners and the proxy
voting agencies explaining the proposed changes to
the Directors’ Remuneration Policy, and subsequently
had a number of conversations with shareowners to
discuss the changes. Others provided comments in
writing. I am grateful for all feedback received; this was
taken into account by the Committee when finalising the
Policy proposals.
I remain as committed to ongoing dialogue with shareowners
as my predecessor was, and welcome any comments or
questions; should shareowners wish to raise any matters
with me, please do not hesitate to get in touch via the
Company Secretary.
Sue Prevezer
Chair, Nomination and Remuneration Committee
23 March 2025
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Directors’ Remuneration Policy
The Directors’ Remuneration Policy set out on the following pages will be subject to a
binding vote of shareowners at the AGM to be held on 4 June 2025 and will formally
apply from that date. Once approved, it will replace the Policy approved by shareowners
at the AGM held on 16 June 2022 and will continue to apply until no later than the AGM in
2028. Payments to Directors and payments for loss of office can only be made if they are
consistent with the terms of the approved Remuneration Policy. The Committee will be
required to seek shareowner approval if it wishes to make a payment to a Director which
is not envisaged by the approved Policy.
The Policy was approved by the Nomination and Remuneration Committee following
a review of the existing Policy and taking into account developments since 2022.
Working with its external adviser, Korn Ferry, the Committee considered the ongoing
appropriateness of the existing Policy in the context of the scale and complexity of the
Company and the markets in which it operates, the level of share ownership among the
Executive Directors, developments in corporate governance and the expectations of
institutional investors. The Committee reflected on the views of key internal stakeholders
and also sought feedback from major shareowners and the leading proxy advisory bodies
before finalising the details of the Policy. As a fully independent Committee, conflicts
of interest were minimised and no individual was responsible for determining his or her
own remuneration.
Key changes to the Remuneration Policy
In general, the new Policy is not fundamentally different to that approved by shareowners in
2022. In addition to annual salary, and a cash bonus scheme, the Employee Share Ownership
Plan remains an integral part of the Policy as the plan under which equity awards will be made
to Executive Directors. The main changes to the Policy approved in 2022 are as follows:
• The maximum bonus opportunity will increase to 150% of basic salary. The Company
will continue to use performance measures which are linked to the immediate strategic
priorities of the business, with targets which are appropriately stretching, taking into
account the higher reward opportunity. This 150% limit is being added at this stage for
flexibility only: the annual bonus limit for the Executive Chairman and the Group CFO
will remain at 100% of salary for 2025.
• The introduction of a requirement that any bonus in excess of 100% of salary must be
deferred into shares for two years for any Executive Director who has not met his or her
shareholding requirement.
• In relation to the Employee Share Ownership Plan, the clarification that awards of up to
250% of basic salary can be granted in exceptional circumstances, with the normal limit
being 200%. The new Policy also clarifies that these limits apply to performance share
awards, with a similar fair value applied if other kinds of awards are granted.
• The removal of the statement that basic salaries are typically set at below-market rates.
This wording is a legacy of S4Capital’s creation, when many of the Executive Directors
in place at the time had large shareholdings and, as a result, deliberately below-market
salaries were set.
• The inclusion of new wording on malus and clawback to comply with the provisions of the
2024 UK Corporate Governance Code, against which S4Capital will report with effect
from the financial year beginning 1 January 2025.
• In addition, a number of minor changes to the wording of the Policy have been made in
the interests of clarification.
The Policy provides the Committee with the ability to exercise discretion in certain
circumstances. This is explained in the relevant sections of the Policy table and in the
sections below the table.
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Policy table for Executive Directors
The table below sets out the core components of the remuneration package for Executive Directors and explains the purpose of each element and how it furthers the strategy of the
Group. The table also summarises the operation of each element and its performance conditions (where relevant), the maximum reward opportunity and the relevant performance metrics.
Element
Purpose and link to strategy
Operation
Maximum opportunity
Performance assessment
Base salary A fixed element of the
Executive Directors’
remuneration, intended
to provide a base level
of income.
Salary is reviewed annually and otherwise by exception.
Takes into account the role performed by the individual and
information on the rates of pay for similar jobs in companies
of comparable size and complexity.
Annual increases will ordinarily be in line
with awards to other people within the
Group. Consistent with other roles within
the Group, other specific adjustments may
be made to take account of any changes
to individual circumstances, such as an
increase in scope and responsibility, an
individual’s development and performance
in the role and any realignment following
changes in market levels.
An individual’s performance
is one of the considerations in
determining the level of annual
increase in salary.
Benefits
A fixed element of the
Executive Directors’
remuneration,
intended to provide a
market-competitive
benefits package.
Benefits such as insurance, fully-expensed transportation,
private medical insurance and life assurance may be paid to
the Executive Directors in line with market practice.
Benefits are set at a level which the
Nomination and Remuneration Committee
considers to be commensurate with the
role and comparable with those provided in
companies of a similar size and complexity.
n/a
Pension
A fixed and standard
element of the Executive
Directors’ remuneration
to support retirement.
Takes into account the role performed by the individual,
the level of pension provided to the wider workforce, and
the legal requirements in the country of appointment.
Payment may be made into a Company pension scheme,
private pension plans or paid as cash in lieu.
The maximum level of pension
contribution is aligned with the rate
payable to the majority of the workforce
or the legal requirements in the Executive
Directors’ country of appointment.
n/a
Annual
Bonus
Scheme
The annual bonus
scheme is intended
to reward Executive
Directors for their
achievements and
the performance
of the Group in the
financial year.
Following the end of each financial year, the Nomination
and Remuneration Committee reviews actual performance
against the objectives set under the scheme and determines
awards accordingly.
Awards are normally paid in cash but the Nomination and
Remuneration Committee has discretion to determine if a
proportion of the bonus should be invested in shares. Where a
Director has not met his or her shareholding guidelines, any bonus
over 100% of basic salary will be deferred into shares and subject
to a minimum two-year holding period.
At the discretion of the Committee, for certain leavers, a pro-rata
annual bonus may become payable at the normal payment date
for the period of employment and based on full-year performance.
Maximum 150% of basic salary.
The Nomination and Remuneration
Committee has discretion regarding
the amount payable for achieving a
minimum level of performance.
The targets against which
annual performance is judged
are determined annually by the
Nomination and Remuneration
Committee. Annual performance
may be assessed against
a combination of financial,
operational, strategic and personal
goals, typically with a majority
weighting on financial goals.
Malus and clawback provisions
apply to payments under the
annual bonus scheme. For more
details see page 87.
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Element
Purpose and link to strategy
Operation
Maximum opportunity
Performance assessment
Incentive
Share
Scheme
The Incentive Shares
and Options are
intended to motivate the
Executive Directors who
are invited to subscribe
for them to contribute
towards the long-
term development of
the Group.
The Nomination and Remuneration Committee reviews the
development of the Group against the terms of the scheme,
as described on page 96.
In aggregate, for all holders of Incentive
Shares and Options, 15% of the growth
in value of S4Capital 2 Limited, as
described on page 96.
A compound annual growth rate
of 6% since the foundational
investment into S4Capital
2 Limited, as described on
page 96.
Employee
Share
Ownership
Plan
(‘ESOP’)
Motivate and incentivise
employees and
Executive Directors to
contribute to the long-
term development of
the Group.
As set out overleaf,
Executive Directors
may become eligible
to participate in other
long-term incentive
arrangements if
deemed appropriate.
Awards over shares which vest subject to the satisfaction
of performance. The vesting period will be up to four years.
Awards can be structured as options (with or without an
exercise price) or conditional share awards.
For Executive Directors, 200% of salary
per annum (or 250% in exceptional
circumstances) for performance share
awards. If other types of award are made,
these would have a similar equivalent
fair value.
The Nomination and Remuneration
Committee has discretion regarding
the amount which may vest for achieving
a minimum level of performance.
This threshold vesting level will vary
depending on the awards that are granted
under the ESOP.
Performance conditions will be
linked to key strategic priorities
or other targets identified at the
time of grant. Normally there
will be a majority or exclusive
weighting on financial targets
(which may include targets linked
to share price).
Malus and clawback provisions
apply to these awards.
Share
Ownership
Guidelines
Requires the Executive
Directors to hold a
minimum level of
shares both during
and after the period of
their employment.
Executive Directors are encouraged to build up and then
subsequently hold a minimum level of shareholding as
soon as reasonably practicable following appointment with
the expectation that this will normally be within five years
of appointment.
Executive Directors are also required to maintain a minimum
level of shareholding for a period of two years following the
cessation of their employment.
The minimum shareholding which should
be built up by an Executive Director is a
holding equivalent in value to 200% of
their basic salary.
Executive Directors must also maintain
a shareholding for a minimum period of
two years following the cessation of their
employment of the lower of (1) the in-
employment shareholding requirement
of 200% of salary and (2) the individual’s
actual shareholding at the time of
their departure.
n/a
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Performance conditions
The performance conditions chosen for the annual bonus scheme and for equity incentives
awarded under the ESOP are intended to align to the key strategic priorities of the Group.
The financial metrics which apply to the bonus scheme are currently based on net revenue,
EBITDA and cash conversion, these being important measures used by the Board and by
management to assess performance. The bonus scheme also uses non-financial metrics
which are linked to specific short-term strategic priorities. For ESOP awards, different
measures have been used depending on the nature of the award. Specific bonus targets
are set based on an assessment of expected levels of performance over the period covered
by the incentive.
For the Annual Bonus Scheme and the ESOP, the performance conditions may change for
future financial years in light of any change to the Company’s circumstances and any other
relevant matter.
The growth condition applying to the Incentive Shares was chosen to reflect a suitable
baseline of performance above which the participants can share in the growth of the
Company over the period since it was established in 2018.
Malus and clawback
The Annual Bonus Scheme includes malus and clawback provisions which may be invoked
by the Nomination and Remuneration Committee at its discretion within the two-year period
following the payment of any bonus in the following circumstances:
• a material misstatement of the financial results of the Company;
• the identification of an error in the calculation of the grant or determination of a
performance target;
• action or conduct which amounts to fraud or gross misconduct or other circumstances
which would have warranted summary dismissal;
• a material failure of risk management;
• circumstances which have a significant impact on the reputation of the Group; and/or
• the insolvency of the Group.
The equity incentives granted to certain Executive Directors under the Employee Share
Ownership Plan are subject to similar malus and clawback provisions. Furthermore,
the Committee intends that similar provisions will be applied to any new long-term
incentive scheme put in place during the lifetime of the Remuneration Policy.
The two-year clawback period is viewed as appropriate as it provides a suitable defined
timeframe for the Group to detect and identify any circumstance which would merit the
clawback provisions being invoked.
Due to the long-term nature of the rewards offered by the Incentive Share scheme,
which only allows the owners of the Incentive Shares to receive benefits under the scheme
once shareowners have experienced significant growth in the value of their investment,
there are no malus and clawback arrangements in respect of awards under this scheme.
Awards are, however, subject to leaver provisions intended to motivate holders to remain
with the Group over the long term (up to 14 years), subject to extension.
Nomination and Remuneration Committee discretion
The Nomination and Remuneration Committee will operate the incentive schemes in
accordance with the relevant scheme rules. Consistent with standard market practice,
the Committee has certain discretions regarding the operation and administration of
these schemes, including as to:
• participants;
• timing of grants or awards;
• size of awards;
• determination of how far performance metrics have been met;
• treatment of leavers or arrangements on a change of control; and
• adjustments of targets and/or measures if required following a specific event
(e.g. material acquisition or disposal).
Any use of these discretions would be explained in the annual report on remuneration
for the relevant year.
In addition, and in accordance with good practice, the Committee has the discretion to
adjust the formulaic outcome of the annual bonus scheme and equity awards granted
to Executive Directors to reflect overall business performance over the vesting period.
A similar discretionary override would be put in place for any new long-term incentive
arrangement put in place during the lifetime of the Remuneration Policy.
Additional long-term incentive arrangements
Under this Remuneration Policy, the Committee has the flexibility to agree additional
long-term incentive arrangements for Executive Directors during the lifetime of the Policy.
This reflects the fast-moving nature of the business environment and the potential need to
react quickly to changing circumstances without needing formal shareowner approval for
an amendment to the Policy. Any new scheme would be aligned to the Company’s medium
and long-term strategy and would include appropriate performance metrics linked to the
financial performance of the Company (unless the Committee determines that other targets
are appropriate).
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If any new long-term incentive plan is established, the limit on the size of individual awards
would be a grant over shares worth up to 200% of base salary each year if granted as
performance shares (with flexibility to increase to 250% of basic salary in exceptional
circumstances). If other types of awards are made, these would have a similar equivalent
fair value. Such awards would vest over a period of up to four years, subject to the
satisfaction of performance targets as noted.
Recruitment
When hiring a new Executive Director, the Committee will use the Remuneration Policy as
the initial basis for formulating the individual’s package. To facilitate the hiring of candidates
of the appropriate calibre to implement the Group’s strategy, the Committee may include
any other remuneration component or award not explicitly referred to in this Remuneration
Policy (or a higher award opportunity than that set out in the Remuneration Policy table)
sufficient to attract the right candidate. Any long-term incentive award granted to a new
appointee would be up to a maximum of 250% of basic salary per annum whilst any annual
bonus award would have a maximum opportunity of 150% of basic salary.
Awards outside the above policy would only be made (i) if they are considered a necessary
part of an acquisition which involves a new Director joining the Board and/or (ii) to buy
out awards being foregone by the incoming Executive Director, with the value of these
buyout awards reflecting the value of the awards foregone. It is the Committee’s intention
that any buyout award would reflect the same delivery vehicle, performance and vesting
horizon of the awards foregone. Where the recruitment requires the individual to relocate,
appropriate relocation costs may be offered.
In determining the appropriate remuneration, the Committee will take into consideration
all relevant factors, including the quantum and nature of the remuneration, to ensure the
arrangements are in the best interests of the Company and its shareowners.
Contracts of service
The Company’s policy is to offer contracts of employment that attract, motivate and retain
skilled people who are incentivised to deliver the Company’s strategy.
The Executive Directors have service agreements with the Company but are remunerated
pursuant to agreements concluded with other entities in the Group. A summary of the
agreements pursuant to which the Executive Directors are remunerated is set out as follows.
The service agreements are available for inspection at the Company’s registered office.
Director
Date of appointment
Date of contract
Notice period
(months)
Sir Martin Sorrell
28 September 20181
24 June 2018
12
Mary Basterfield
3 January 20222
14 November 2021
12
Notes:
1. Sir Martin has acted as a Director of S4Capital 2 Limited since its foundation on 23 May 2018, which is the effective
date of the start of his employment pursuant to his service agreement.
2. Date of appointment as a Director. Joined the Company on 13 December 2021. On 9 January 2025 it was
announced that Mary Basterfield would be stepping down from the Board.
Policy on payments for loss of office
The service agreements for the Executive Directors allow for lawful termination of
employment by making a payment in lieu of notice or by making phased payments over
any remaining unexpired period of notice. There is no automatic or contractual right to
annual bonus payments. At the discretion of the Committee, for certain leavers, a pro-rata
annual bonus may be payable at the normal payment date for the period of employment and
based on full year performance. Should the Committee decide to make a payment in such
circumstances, the rationale would be fully disclosed in the annual Remuneration Report.
The equity incentives awarded to Executive Directors under the Employee Share Ownership
Plan include customary leaver provisions. In certain specific ‘good leaver’ circumstances
(death, illness or disability, the business for which the individual works no longer being
part of the Group, or any other reason determined by the Committee), the Committee may
determine that awards which have not vested at the date of cessation shall continue and be
available for vesting on the normal vesting date. The extent of vesting would depend upon
the satisfaction of the relevant performance conditions. The award would also be subject
to a pro-rata reduction to reflect the number of completed days in the period between
the grant date and the date of cessation as a proportion of the total number of days in the
vesting period. The Committee has the discretion to disapply this time pro-rating if deemed
appropriate. If the Committee deems the individual to be a ‘bad leaver’, then any unvested
award would lapse immediately on the date of cessation.
In the event of a change of control or winding up of the Company, the Committee has the
discretion to determine that the performance conditions would continue to apply, and that
the number of shares which vest would be subject to prorating to reflect the number of
completed days between the grant date and the date of the corporate event.
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The Committee reserves the right to make additional liquidated damages payments outside
the terms of the Directors’ service contracts where such payments are made in good faith
in order to discharge an existing legal obligation, or by way of damages for breach of such
an obligation, or by way of settlement or compromise of any claim arising in connection with
the termination of a Director’s office or employment.
Legacy arrangements and other payments
The Committee reserves the right to make amendments to the Remuneration Policy for
minor administrative matters in exceptional circumstances. The Committee would only
use this right where it believes this would be in the best interests of the Company and
when it would be disproportionate to seek the specific approval of shareowners at a
general meeting.
Outside appointments
The Company recognises that Executive Directors may be invited to become non-executive
directors of other companies and that this can help broaden their skills and experience.
Subject to Board approval, Executive Directors are permitted to take on other non-executive
positions with other for-profit companies and to retain their fees in respect of such a position.
Statement of consideration of employment conditions elsewhere in
the Group
The Group operates in fast-moving sectors across multiple jurisdictions. Pay levels and
structures for people across the organisation are designed to be competitive and to reflect
the dynamics in specific markets. Performance-related pay is a significant part of the
remuneration of many employees, with annual cash incentives and equity awards used
as appropriate to ensure suitably competitive compensation packages. The Committee
regularly considers matters relating to compensation across the organisation and
takes this into account when making decisions on the Directors’ Remuneration Policy.
Although certain elements of remuneration arrangements for the Executive Directors
(such as the Incentive Share Scheme) differ from those available to other employees,
the Committee is satisfied that there is sufficient alignment between the Directors and other
employees. There is a focus on performance across all levels of the business. For example,
Group financial and non-financial performance (which determines bonus payments to the
Executive Directors) is taken into account when awarding bonuses to employees across the
Group. Among other things the Committee compares the level of bonus outcome for the
Directors with awards for others across the business to consider alignment and fairness.
The Group’s people were not directly consulted in setting the Directors’ Remuneration
Policy. However, the Committee regularly considers matters relating to compensation
across the organisation and takes this into account when making decisions in respect
of the Policy.
Consideration of shareowner views
The Committee considers it extremely important to maintain open and transparent
communication with the Company’s shareowners. The views of shareowners are received
through various avenues, such as at the AGM, during meetings with investors and through
other contact during the year. These views are considered by the Committee and help to
inform the development of the overall Remuneration Policy.
In early 2025 the Committee Chair wrote to major shareowners and the leading proxy voting
agencies to seek their feedback on the shape of the Policy and the proposed changes to
the Policy to be approved at this year’s AGM. The comments received were considered by
the Committee and taken into account when finalising this Policy.
Illustrations of the application of the Remuneration Policy
The charts below show an indication of the level of remuneration that each Executive
Director could receive in the current financial year under the terms of the Remuneration
Policy. The charts show the level of remuneration based on three levels of remuneration:
• Minimum: remuneration which is not subject to the satisfaction of performance
conditions, i.e. basic salary, taxable benefits and pension contributions.
• Target: fixed remuneration plus a 50% payout under the annual bonus scheme and,
in the case of the Group Chief Financial Officer, her equity grant under the ESOP.
• Maximum: fixed remuneration plus a 100% payout under the annual bonus scheme
and, in the case of the Group Chief Financial Officer, her equity grant under the ESOP.
The maximum scenario includes an additional element to represent 50% share price
growth on the Group Chief Financial Officer’s equity grant.
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The chart for the Executive Chairman does not include an amount in respect of the
Incentive Share scheme as the absence of a monetary cap on the value of the ultimate
rewards means that it is not possible to accurately forecast potential payouts. The chart
for the Group Chief Financial Officer recognises that half of her equity award is granted as
market-value share options, which have a lower value than performance shares. The charts
do not include amounts in respect of other long-term incentive awards as no decisions
about the nature and scope of such awards have been made as at the date of finalisation
of this report.
£392k
DRR Scenario Sir Martin Sorrell
Fixed
£652k
Maximum
£522k
On target
100%
75.1%
60.1%
24.9%
39.9%
Fixed Pay
Annual Bonus
£473k
DRR Scenario Mary Basterfield
Fixed
£1,248k
Maximum
£861k
On target
100%
55.0%
37.9%
26.1%
36.1%
Maximum with 50%
share price growth
33.5%
31.9%
18.9%
26.0%
23.0%
11.5%
£1,411k
Fixed Pay
Annual Bonus
Equity Grant
Equity Grant with 50% share price growth
Letters of appointment
The terms of appointment of the Non-Executive Directors are set out in their respective
letters of appointment. Appointment as a Non-Executive Director is subject to a three-
month notice period. The Group has no obligation to make termination payments if a
Non‑Executive Director is not re-elected as a Director at an AGM.
The appointment of Rupert Faure Walker is governed by his appointment letter with
S4 Limited, which remained in place following the completion of the Company’s acquisition
of S4Capital 2 Limited on 28 September 2018.
Director
Date of appointment
Date of letter of
appointment
Notice period
(months)
Rupert Faure Walker
28 September 2018
12 March 20211
3
Sue Prevezer
14 November 2018
3 November 2018
3
Daniel Pinto
24 December 2018
4 December 2018
3
Elizabeth Buchanan
12 July 2019
11 June 2019
3
Margaret Ma Connolly
10 December 2019
6 December 2019
3
Miles Young
1 July 2020
30 June 2020
3
Colin Day
2 August 2022
2 August 2022
3
Note:
1. A new letter of appointment was signed with Rupert Faure Walker on this date, superseding those dated 24 June
2018 and 10 September 2018.
Policy table for the Non-Executive Directors
Element
Purpose and link
to strategy
Operation
Maximum
opportunity
Performance
assessment
Fees
To attract
and retain
Non‑Executive
Directors with
adequate
experience
and knowledge.
The fees of the Non-Executive
Directors are determined by the
Board based upon comparable
market levels and time
commitment. The Non-Executive
Directors do not participate
in any performance-related
incentive arrangements, nor do
they have any entitlement to
benefits or pension contributions.
Directors may be paid additional
amounts for services such as
acting as the Senior Independent
Director or as a Committee Chair.
The maximum
fees payable
are subject to
an aggregate
annual limit
as set out in
the Articles of
Association
which is
currently
£500,000.
n/a
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Recruitment of new Non-Executive Directors
Any new Non-Executive Director appointed during the period covered by this Remuneration Policy will have their remuneration set in line with the provisions of the Policy table.
Annual Remuneration Report
The information provided in this Annual Remuneration Report is subject to audit where indicated. Details of the Directors’ interests in the share capital of the Company are set out on
page 95. The remuneration of the Executive Directors for the year to 31 December 2024 is presented below with a comparison for the year to 31 December 2023.
Executive Directors’ remuneration as a single figure (audited)
Salary
All taxable benefits1
Annual bonus
Incentive shares
Pension
Other
Total7
Total fixed
remuneration
Total variable
remuneration
£000
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Sir Martin Sorrell
260
258
121
103
96
–
–
–
10
10
–
–
487
371
391
371
96
–
Victor Knaap2, 3
78
188
6
16
29
–
–
–
4
8
–
–
117
212
88
212
29
–
Wesley ter Haar2, 3
78
188
6
16
29
–
–
–
4
7
–
–
117
211
88
211
29
–
Christopher S.
Martin3,4
151
308
–
–
–
–
–
–
4
8
–
–
155
316
155
316
–
–
Scott Spirit3,5
142
333
15
21
52
–
–
–
6
13
–
–
215
367
163
367
52
–
Mary Basterfield6,8
401
381
5
4
148
–
–
–
16
15
83
96
653
496
422
400
231
96
Total
1,110
1,656
153
160
354
–
–
–
44
61
83
96
1,744
1,973
1,307
1,877
437
96
Notes:
1. Taxable benefits include, and in the case of Sir Martin Sorrell exclusively comprise, amounts relating to health insurance.
2. The remuneration of Victor Knaap and Wesley ter Haar is converted into sterling from euros using the average exchange rate for the year, consistent with the basis of the presentation of financial performance in the financial statements.
3. Victor Knaap, Wesley ter Haar, Christopher S. Martin and Scott Spirit stepped down from the Board on 6 June 2024. No payments were made for loss of office, and with the exception of Christopher S. Martin who left the Group on
31 July 2024, all remain employed with the Group. The amounts shown for 2024 for these former Directors in the table above relate to remuneration in respect of the period from 1 January 2024 to 6 June 2024.
4. The remuneration of Christopher S. Martin is converted into sterling from US dollars using the average exchange rate for the year, consistent with the basis of the presentation of financial performance in the financial statements.
5. The remuneration of Scott Spirit is converted into sterling from Singaporean dollars using the average exchange rate for the year, consistent with the basis of the presentation of financial performance in the financial statements.
6. For Mary Basterfield, the amount disclosed under ‘Other’ for 2024 is the value as at the end of 2024 of the equity award granted during the year in connection with her recruitment, for which performance was measured over the 2024
financial year, and reflecting the Nomination and Remuneration Committee’s decision that performance should be assessed at 37%. £nil of this amount is attributable to share price appreciation. The shares will vest in August 2026, in line
with their terms as disclosed in previous Directors’ Remuneration Reports. The amount disclosed under ‘Other’ for 2023 includes £59,342 as the value at the end of 2023 of the equity award granted during the year in connection with her
recruitment, for which performance was measured over the 2023 financial year, and reflecting the Nomination and Remuneration Committee’s decision that performance should be assessed at 50%. £nil of this amount is attributable to
share price appreciation. The shares will vest in August 2026. The amount disclosed under ‘Other’ for 2023 also includes £36,995 as the value at vesting of the share award granted to Mary in December 2021 prior to her appointment as
an Executive Director. £nil of this amount is attributable to share price appreciation.
7. Total remuneration for Mary Basterfield is the aggregate remuneration of the highest paid UK Director.
8. The taxable benefits for Mary Basterfield for 2023 has been restated to include the value of the health insurance premium received in 2023.
S4Capital plc Annual Report and Accounts 2024
91
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Remuneration Report continued
Salary (audited)
As disclosed in last year’s report, the salaries of the Executive Directors were increased with
effect from April 2023. No further increases were implemented in April 2024. The annual
salary of Sir Martin Sorrell for 2024 remained at £260,000. Mary Basterfield’s salary was
increased from £384,800 to £450,000 with effect from 1 October 2024, as explained on
page 80.
Pension (audited)
For 2024, all Executive Directors’ pensions were aligned with the wider workforce or to the
legal requirements in place in their country of appointment. Pension contributions for Sir
Martin Sorrell and Mary Basterfield were at a rate of 4% of basic salary. Mary Basterfield’s
contributions were paid into the Company’s pension scheme. Sir Martin Sorrell received a
payment of a cash amount in lieu of pension.
Annual bonus scheme (audited)
The 2024 bonus scheme was based on the achievement of performance targets linked to
the Group’s strategic priorities. 70% of the bonus was payable by reference to performance
against Group financial metrics, and the remaining 30% was payable by reference to key
non-financial objectives.
The specific financial metrics are set out in the table below.
Weighting
(% of total bonus)
Targets
Result
Net revenue growth
25% (1.4%) growth on like-for-like basis vs FY23
(11.1%)
EBITDA margin
25%
11.4% as percentage of net revenue
12%
EBITDA to
cash conversion1
20%
70% to 80% ratio
115%
Note:
1. Defined as EBITDA less capex less change in working capital/EBITDA.
For the 30% of the bonus subject to non-financial objectives, targets were set based on the ongoing integration of the various businesses within S4Capital, Diversity, Equity and Inclusion,
ESG, and AI, as summarised below.
Objective
Targets
Weighting (%
of total bonus)
Achievements
Score
Integration
• Unifying business processes to improve efficiency and further
enhance the ‘one S4Capital’ approach.
• Identifying and managing execution of opportunities to integrate
the S4Capital Group’s physical presence.
• Working as an integrated team to identify and execute
opportunities to grow the top line.
10%
• Creation of Marketing Services practice concept.
• Further work to be done on fully integrating across Marketing Services
and Technology Services.
50%
Diversity, Equity
and Inclusion
• Improving the Black representation in the US towards the goal
of 13%.
• Improving the percentage of women in leadership towards the
goal of 50%.
2.5%
• Target not achieved: slight decrease in Black representation from 5.6%
to 5.2%.
• Target not achieved: women in leadership at 36.9% vs 38.3% in 2023.
0%
ESG
• Formal approval of Science-Based Emission Targets for the next
10 years by SBTi.
• Improve EcoVadis score.
• Complete B Corp final assessment.
2.5%
• SBTi targets have been approved. Execution plan still waiting
for approval.
• EcoVadis score submitted and improved from 44/100 (FY22) to 49/100.
• B Corp Certification granted.
100%
AI
• Increase in usage of AI.
15%
• Monks.Flow platform launched 1 August 2024 with over 800 unique
users onboarded by the end of December 2024.
66%
S4Capital plc Annual Report and Accounts 2024
92
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Remuneration Report continued
Following the end of the financial year, the Committee considered in detail the
achievements against both the financial and non-financial targets as set out on the previous
page, which on a formulaic basis would have resulted in a bonus equivalent to 62.5% of the
maximum opportunity.
However, mindful of the Company’s overall financial results for the year, the Committee
considered that the formulaic calculation was not representative of Group or share price
performance during the year and therefore chose to exercise its discretion and override
the formulaic calculation, resulting in a determination that a bonus level of 37% of the
maximum opportunity should be paid to the Executive Directors.
Share awards for the Group Chief Financial Officer (audited)
Award granted during 2024 and vesting based on performance measured in 2024
In accordance with the terms of her appointment, and as described in the audited 2021
Directors’ Remuneration Report, it was agreed that Mary Basterfield would receive four
separate grants of equity over the first four years of her appointment. Each award has a
face value of £500,000.
The first and second awards were granted in 2022 and 2023 respectively, in both cases as
a mix of market-priced options and conditional shares. The use of market-priced options
ensures a focus on share price growth as well as the performance conditions attached to
the awards. Full details of the performance conditions and the outcome for both of these
awards were included in the relevant year’s Remuneration Report.
The third award was granted during 2024, also a mix of market-priced options and
conditional shares. The Nomination and Remuneration Committee agreed that the award
should incorporate the same performance conditions as the annual bonus scheme (as
detailed in the bonus section). In line with the outcome for the annual bonus scheme for
2024, the formulaic performance assessment was 62.5%. However, the Committee
exercised its discretion to reduce the performance outcome to 37%, consistent with the
approach for the annual bonus (see previous page). Accordingly, 63% of the award will
lapse. The remaining 37% will vest in August 2026, being four years after the date of grant
of the first share award in 2022. There are no additional performance conditions which
must be met prior to the vesting date.
The number of shares awarded and the number scheduled to vest following the assessment
of the performance condition is set out in the table below.
Director
Date of grant
Face value of award
Number of shares/options awarded1
Exercise price (£)
Vesting proportion
No. of shares
options to vest
Value as at
31 Dec 20243
Vesting date
Mary
Basterfield
28 March 2024
£250,000
616,621 share options
0.40541
37%
228,150
£Nil
2 Aug 2026
28 March 2024
£250,000
616,621 conditional shares
n/a2
37%
228,150
£83,142
2 Aug 2026
Notes:
1. The number of shares awarded and the exercise price for the share options was based on the 30-day volume weighted average price per share, as calculated on the date of grant.
2. These awards were granted as conditional share awards and do not have an exercise price.
3. The value of these awards has been calculated based on a share price of 36.56p, being the average share price over the final three months of the 2024 financial year. Of the total value, £nil is deemed attributable to share price appreciation
since the date of grant.
S4Capital plc Annual Report and Accounts 2024
93
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Remuneration Report continued
Long-term incentives granted during the year (audited)
No new long-term incentive awards were granted to Executive Directors during 2024.
Full details of the awards granted to Directors in 2023 can be found in last year’s Directors’
Remuneration Report.
Non-Executive Directors’ remuneration as a single figure (audited)
£000
Year to
31 December 20241
Year to
31 December 2023
Rupert Faure Walker
53
48
Paul Roy2
23
45
Sue Prevezer
49
38
Daniel Pinto
44
38
Elizabeth Buchanan
44
38
Naoko Okumoto2
19
38
Margaret Ma Connolly
44
38
Miles Young
44
38
Colin Day
54
45
Notes:
1. With effect from 1 July 2024, the basic fee was increased from £37,500 per annum to £50,000 per annum,
with an additional fee of £10,000 paid to the Senior Independent Director and the Chair of the Nomination and
Remuneration Committee (both previously £7,500) and an additional fee of £12,500 paid to the Chair of the Audit
and Risk Committee (previously £7,500). There were no increases to the fees payable to the Non-Executive
Directors during 2023.
2. Retired from the Board on 6 June 2024.
Payments for loss of office/Payments to past Directors (audited)
No payments for loss of office or payments to past Directors were made during 2024.
Directors’ interests in shares and share options (audited)
Details of Directors’ interests in Ordinary Shares, unvested and vested share awards,
and Incentive Shares are shown in the table overleaf. Sir Martin Sorrell is a substantial
shareowner in the Company as a consequence of his foundational investment into
S4Capital 2 Limited.
The Directors’ Remuneration Policy includes a minimum shareholding requirement for
Executive Directors to build and hold shares equivalent in value to 200% of their basic
salary. This holding should be built up as soon as reasonably practicable following
appointment and with the expectation that this will normally be within five years of
appointment. The Policy also includes a requirement for Executive Directors to maintain a
shareholding for a minimum period of two years following the cessation of their employment
of the lower of (1) the in-employment shareholding requirement of 200% of salary and (2)
the individual’s actual shareholding at the time of their departure.
S4Capital plc Annual Report and Accounts 2024
94
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Remuneration Report continued
Details of Directors’ interests in Ordinary Shares, unvested and vested share awards, and Incentive Shares as at 31 December 2024, or their date of resignation, are set out in the
table below.
Director
Interest in
Ordinary
Shares
Unvested Share
Awards and Share
Options subject to
performance
conditions
Unvested Share
Awards and Share
Options subject to
no performance
conditions
Vested but
unexercised
Share Options
Interest in
incentive
instruments
Shareholding
requirement
(% of basic salary)
Shareholding
requirement met
Executive Directors
Sir Martin Sorrell1
54,229,594
–
–
–
4,000
200%
Yes
Mary Basterfield
60,618
1,628,114²
378,6963
–
–
200%
No
Non-Executive Directors
Rupert Faure Walker
1,008,450
–
–
–
–
–
–
Sue Prevezer
293,512
–
–
–
–
–
–
Daniel Pinto4
13,572,769
–
–
–
–
–
–
Elizabeth Buchanan
37,777
–
–
–
–
–
–
Margaret Ma Connolly
19,523
–
–
–
–
–
–
Miles Young
50,000
–
–
–
–
–
–
Colin Day
109,695
–
–
–
–
–
–
Former Directors
Wesley ter Haar5
17,546,067
400,572
–
–
–
200%
Yes
Victor Knaap5
17,546,066
400,572
–
–
–
200%
Yes
Christopher S. Martin5
6,476,522
746,524
–
–
–
200%
Yes
Scott Spirit6
307,194
–
–
–
2,000
200%
No
Naoko Okumoto
25,396
–
–
–
–
–
–
Paul Roy
1,950,129
–
–
–
–
–
–
Notes:
1. Sir Martin Sorrell holds 4,000 A2 Incentive Shares and also holds the B share.
2. These awards reflect the share options and conditional share awards granted during 2023 under the long-term incentive plan (as disclosed in last year’s report) and also include the separate share award granted to Mary Basterfield in 2024
in connection with the arrangements agreed at the time of her recruitment as detailed on page 80.
3. Reflects the number of share options and conditional share awards remaining from the awards granted to Mary Basterfield in 2022 and 2023 in connection with the arrangements agreed at the time of her recruitment. These awards are
scheduled to vest in August 2026. There are no further performance conditions attached to these awards.
4. Comprises 232,600 shares held personally and 13,340,169 shares acquired by Stanhope Entrepreneur Fund, a growth capital fund managed by Stanhope Capital Group, of which Daniel Pinto is Chief Executive.
5. Victor Knaap and Wesley ter Haar hold their interests in Ordinary Shares through (i) Oro en Fools B.V., their joint personal holding vehicle which is owned (indirectly) 50% by Victor Knaap and 50% by Wesley ter Haar; and (ii) Zen 2 B.V.,
the ordinary share capital of which is owned 51% by Oro en Fools B.V. and 49% by funds managed by Bencis Capital Partners B.V. The interests in Ordinary Shares of Victor and Wesley noted above are the aggregate totals of the ordinary
shares held by these entities. Certain of the interests of Christopher S. Martin are held through certain family trust arrangements.
6. Scott Spirit has options to subscribe for a total of 2,666 A1 Incentive Shares (this includes the 2,000 Incentive Share Options disclosed in the table above), as explained on page 96.
There were no changes to Directors’ interests during the period from 31 December 2024 to the date of this report.
S4Capital plc Annual Report and Accounts 2024
95
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Remuneration Report continued
The S4Capital 2 Limited Scheme
Arrangements were put in place shortly after the formation of S4Capital 2 Limited (formerly
S4Capital Limited) to create incentives for executives who were expected to make key
contributions to the success of the Group. The Group’s success depends upon the sourcing
of attractive investment opportunities and the improvement of the performance of any
businesses that are acquired. Accordingly, an incentive scheme (the S4Capital 2 Limited
Scheme, or the Incentive Share Scheme) was created to reward key contributors for the
creation of value through the use of Incentive Shares.
Sir Martin Sorrell subscribed for A2 Incentive Shares in May 2018 and Scott Spirit was
granted an option to subscribe for A1 Incentive Shares in January 2020. The terms of these
awards are set out in the table below.
Director
Number of Incentive Instruments
Date of issue
Sir Martin Sorrell
4,000 A2 Incentive Shares
29 May 2018
Scott Spirit1
2,000 A1 Incentive
Share options
Option issued 27 January 2020
following Nomination and Remuneration
Committee approval December 2019
Note:
1. Scott Spirit also has an option to subscribe for up to an additional 666 A1 Incentive Shares in the event of the issue
of any further Incentive Shares by the Directors. The purpose of this additional award is to ensure that his interest in
the Incentive Shares is maintained at the same level (5%, being one third of the total 15%) in the event of the issue
of further Incentive Shares.
There were no new Incentive shares awarded under the S4Capital 2 Limited Scheme during
the year ended 31 December 2024.
The Directors of S4Capital 2 Limited have the authority to issue a further 2,000 A1 Incentive
Share options. The issue of further Incentive Shares will not increase the aggregate
entitlement of the holders of Incentive Shares above 15% of the growth in value of
S4Capital 2 Limited.
The Incentive Shares are subject to a number of conditions, as set out below.
Terms of the S4Capital 2 Limited Scheme
The Incentive Shares entitle the holders, subject to certain performance criteria and
leaver provisions, to up to 15% of the growth in value of S4Capital 2 Limited from the
plan’s inception provided that the growth condition (as described overleaf) has been met.
The growth in value of S4Capital 2 Limited is measured against the market capitalisation of
the Company based on an average of the mid-market closing price of the Ordinary Shares
over the preceding 30 trading days, plus any dividends or distributions to the Company’s
shareowners prior to the date of calculation and then deducting the net asset value of the
Company on a standalone basis, ignoring the investment in S4Capital 2 Limited and its
subsidiaries, and deducting the aggregate amount invested in the Company whether in
cash or by issue of shares in its acquisitions, mergers and combinations.
Provided that the growth condition has been satisfied, the Incentive Shares entitle the
holders to their return upon a sale or combination of S4Capital 2 Limited, its liquidation,
the takeover or combination of the Company or, if none of those events has occurred
prior to 9 July 2023 (being the fifth anniversary of the combination with Media.Monks
by S4Capital 2 Limited), if Sir Martin Sorrell serves notice on the Company requiring it
to acquire all of the Incentive Shares eligible for sale on or before 9 July 2025 (being
the seventh anniversary of the combination with Media.Monks) or such later date as the
Company and each of the Incentive Share classes agree. If Sir Martin serves such a notice,
the growth in value of S4Capital 2 Limited is measured against the market capitalisation
of the Company based on an average of the mid-market closing price of the Ordinary
Shares over the preceding 30 trading days, plus any dividends or distributions over time.
Once triggered, all of the Incentive Shares eligible for sale receive value at the same time
on a pro-rata basis and then automatically reset such that they may receive the same return
over a second period of up to seven years, subject to extension.
The consideration payable if the Incentive Shares are triggered, save on a takeover,
liquidation or combination of S4Capital 2 Limited, will be satisfied by the issue of Ordinary
Shares in S4Capital plc at the average of the mid-market closing price of the Ordinary
Shares over the 30 trading days preceding the triggering of the Incentive Shares.
Growth condition
The growth condition is the compound annual growth rate of the invested capital in
S4Capital 2 Limited being equal to or greater than 6% per annum since the foundational
investment into S4Capital 2 Limited on 29 May 2018. The growth condition takes into
account the date and price at which shares in S4Capital 2 Limited have been issued,
the date and price of any subsequent share issues and the date and amount of any
dividends paid, or capital returned by S4Capital 2 Limited to the Company. Any cash raised
by the Company from time to time has been and will continue to be invested in S4Capital 2
Limited so that the growth condition will apply to that capital also.
As at 31 December 2024, the growth condition had not been met as there had been no
growth in the invested capital when measured against the Company’s market capitalisation.
Compulsory redemption
If the growth condition is not satisfied on or before 9 July 2025 (being the seventh
anniversary of the combination with Media.Monks), or such later date as the Company
and each of the Incentive Share classes agree, the Incentive Shares must be sold to the
Company at a price per Incentive Share equal to the subscription price of £25.00 per
Incentive Share.
S4Capital plc Annual Report and Accounts 2024
96
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Remuneration Report continued
Leaver provisions
The Incentive Shares are subject to leaver provisions. If a holder of Incentive Shares ceases
to be employed by or hold office with the Group, that holder will become a ‘Leaver’ and,
depending on the circumstances of his or her departure, certain of his or her Incentive
Shares may be subject to forfeiture.
Total Shareholder Return
The chart below illustrates the performance over the period of an investment of £100 in
the Company’s shares made on 13 September 2018, shortly before the Company acquired
the S4Capital Group and was re-admitted to trading on the Official List, to 31 December
2024. This has been compared to the performance of the same investment on the
same date in the FTSE 350. This comparator has been chosen as it is a broad equity
market index of large and medium-sized UK-listed companies, many of which have an
international dimension.
0
13 Sep
2018
31 Dec
2018
31 Dec
2020
31 Dec
2019
31 Dec
2022
31 Dec
2023
31 Dec
2021
31 Dec
2024
100
200
700
600
500
400
300
800
£
S4Capital plc
FTSE 350
Source: LSEG Workspace
The table below sets out the Executive Chairman’s total remuneration as a single figure, together with the percentage of maximum annual bonus awarded over the same period as the
previous chart in respect of the Company’s share price.
Director
Year to
31 December 2018
Year to
31 December 2019
Year to
31 December 2020
Year to
31 December 2021
Year to
31 December 2022
Year to
31 December 2023
Year to
31 December 2024
Executive Chairman single figure of remuneration (£000)
140
272
218
203
509
371
487
Annual bonus payout (% of maximum)
100%
85%
75%
0%
40%
0%
37%
Share award vesting (% of maximum)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
S4Capital plc Annual Report and Accounts 2024
97
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Remuneration Report continued
Percentage change in remuneration of Directors compared to employees
The table below shows the year-on-year percentage change in salary, benefits and bonus for each Director for each of the last five financial years, compared with the average change in
employee pay.
The figures for the Directors are based on the disclosures in the single total figure table on page 91 and the corresponding tables from previous Directors’ Remuneration Reports.
2024 vs 2023
2023 vs 2022
2022 vs 2021
2021 vs 2020
2020 vs 2019
Salary/ Fees
Benefits
Bonus
Salary/ Fees
Benefits
Bonus
Salary/ Fees
Benefits
Bonus
Salary/ Fees
Benefits
Bonus
Salary/ Fees
Benefits
Bonus
Executive Directors
Sir Martin Sorrell
0.8%
17.4%
100%
3%
22.6%
(100%)
150%
14%
100%
33%
62%
(100%)
(25%)
(21%)
(12%)
Mary Basterfield1,3
5.2%
25%
100%
3%
100%
(100%)
–
–
–
–
–
–
–
–
–
Non-Executive Directors
Rupert Faure Walker
10.4%
–
–
11.8%
–
–
-4%
–
–
32%
–
–
35%
–
–
Sue Prevezer
28.9%
–
–
0%
–
–
0%
–
–
36%
–
–
13%
–
–
Daniel Pinto
15.8%
–
–
0%
–
–
0%
–
–
36%
–
–
13%
–
–
Elizabeth Buchanan1
15.8%
–
–
0%
–
–
0%
–
–
36%
–
–
–
–
–
Margaret Ma Connolly1
15.8%
–
–
0%
–
–
0%
–
–
36%
–
–
–
–
–
Miles Young1
15.8%
–
–
0%
–
–
0%
–
–
–
–
–
–
–
–
Colin Day1
20.0%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
All UK Group employees2
1.3%
5.7%
(34.4%)
4%
0%
25%
4%
3%
(68%)
(6%)
(6%)
(67%)
3%
(16%)
11%
Notes:
1. Percentage change not shown for these Directors in certain periods as they had part-year service for one of the comparative periods.
2. Included to provide a more representative sample of the wider employee base in the UK. The listed entity, S4Capital plc, has no direct employees.
3. The movements against 2023 for benefits for Mary Basterfield have been restated to include the value of the health insurance premium received in 2023.
Pay ratio
The table below reports the pay ratio for the year ended 31 December 2024 and has been calculated using the method known as Option A, which involves calculating a single figure for
each UK employee based on their actual pay for the year. This ensures that the most accurate information is used for the purposes of calculating the ratio and is the option most favoured
by investors.
Year1
Method
25th percentile
pay ratio
Median pay ratio
75th percentile
pay ratio
2024
Option A
11.5
7.9
5.8
Total pay and benefits £000
42
62
84
Salary £000
39
58
79
2023
Option A
8.4
6.0
4.5
2022
Option A
12.1
8.5
6.2
2021
Option A
5.0
3.6
2.6
2020
Option A
5.3
3.7
2.8
2019
Option A
6.8
5.8
4.1
Note:
1. The calculations of the pay for the employees at the different levels have been calculated as of 31 December of each relevant year.
S4Capital plc Annual Report and Accounts 2024
98
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Remuneration Report continued
A full-time equivalent calculation has been applied to the pay of part-time employees and
those leaving or joining during each year to ensure an appropriate annualised comparison
with the pay of the Executive Chairman. The Committee believes that the median pay ratio
for 2024, as disclosed in the table above, is reflective of the current pay policies across
the UK employee base at this stage, and is consistent with the wider pay, reward and
progression policies affecting UK employees. Employees’ pay packages are designed to
be competitive and to ensure that performance as a whole is rewarded through appropriate
incentive schemes. As illustrated in the table above, the 2024 pay ratio increased across all
quartiles compared to the prior year, reflecting the inclusion of the Executive Chairman’s
bonus payment, which, at the time of writing, had not been calculated for UK employees, as
well as headcount reduction actions undertaken in the last quarter.
S4Capital is a global business with approximately 7,150 employees in 33 countries.
Multiple different compensation arrangements have been inherited from the various
businesses acquired over the period since S4Capital was established. A key focus of
management in recent years has been to ensure a greater level of harmonisation of
people and compensation practices across the whole Group. Pay and benefits policies
and practices are increasingly standardised across the whole Group, with fixed pay
supplemented by variable compensation to reward key talent effectively in what remain
very competitive employment markets. Equity is granted to selected key employees either
in the form of long-term incentives (mirroring the approach taken for certain Executive
Directors) or as retention awards with extended vesting periods.
The Committee regularly reviews wider workforce remuneration, with a focus on the
incentives available across the organisation, cash bonus awards, equity grants to key
employees and salary increases. On a number of occasions during the year, members of the
Committee have engaged with representatives of the wider workforce to discuss a number
of issues, including the culture of the business, performance and the experience of working
for S4Capital. This, plus the insights gained from the people teams within the organisation
has ensured the Committee has a good understanding of remuneration matters across
the company.
Relative importance of spend on pay
The table below shows the relative importance of spend on pay for all of the Group’s people
in comparison to distributions to shareowners. Total pay includes wages and salaries,
pension costs, social security and share-based payments. The Board is recommending a
final dividend of 1 pence per share in respect of the year ended 31 December 2024.
Year to
31 December
2024
Year to
31 December
2023
% change
Average number of employees
7,498
8,374
-10.4
Total personnel costs (£000)
581,515
670,845
-13.3
Total distributions to shareowners (£000)
6,100
–
100
Statement of voting on remuneration
The table below provides details of the voting results on (1) the Directors’ Remuneration
Report resolution presented for shareowner approval at the AGM in June 2024, and (2) the
Directors’ Remuneration Policy resolution presented for shareowner approval at the AGM in
June 2022.
Votes for
Votes against
Total votes
cast Votes withheld
Approve the Directors’
Remuneration Report (2024 AGM)
228,268,961
24,577,121
252,846,082
165,762
90.28%
9.72%
Approve the Directors’
Remuneration Policy (2022 AGM)
162,386,097
70,564,359
232,950,456
29,199,926
69.71%
30.29%
The Committee’s response to the outcome of the vote on the Remuneration Policy at
the 2022 AGM was described in the Remuneration Report of the Annual Report and
Accounts 2023.
Nomination and Remuneration Committee membership and meetings
The Committee is comprised solely of independent Non-Executive Directors with a wide
range of experience. Biographical details of the Committee Chair and members can be
found on pages 60 to 63. The Committee met seven times during the year and the meeting
attendance of the Committee members can be found on page 68. Additional attendees at
Committee meetings may include the Executive Chairman, Group Chief Financial Officer,
Global Chief People Officer, Company Secretary and Deputy Company Secretary, and the
Head of Equity and Executive Remuneration. No individual participates in decisions
regarding his or her own remuneration.
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The Board is satisfied that the Committee has the resources and expertise to fulfil its
responsibilities and the Committee is authorised to seek external legal or independent
advice as it sees fit.
The Terms of Reference for the Committee were last reviewed in December 2024. A copy
of the Committee’s current Terms of Reference can be found on the Company’s website.
External advisers
Korn Ferry is the Committee’s remuneration adviser and was appointed by the
Committee in 2019 following the Committee’s decision to seek regular external advice
on remuneration matters and consideration of potential providers. Korn Ferry provides
independent commentary and advice, together with updates on legislative requirements,
best practice and market practice to assist with its decision making. The fees paid to Korn
Ferry in respect of work carried out for the Committee during 2024 totalled £76,750.
Fees are determined on a time and materials basis using standard hourly rates for Korn
Ferry consultants.
The Committee undertakes due diligence to ensure that the remuneration advisers
remain independent of the Group and that the advice provided is impartial and objective.
Korn Ferry reports directly to the Committee and is a member of the Remuneration
Consultants Group and operates under its code of conduct. No other services were
provided by Korn Ferry to the Company during 2024.
Implementation of Remuneration Policy for 2025
Subject to shareowner approval of the new Directors’ Remuneration Policy at the 2025
AGM, the Nomination and Remuneration Committee intends to implement the Policy
as follows.
Basic salary
Mary Basterfield will not receive a basic salary increase in 2025. The Committee has not
yet finalised a decision on any other Executive Director for 2025. Any increase, if agreed,
will be effective no earlier than 1 April 2025. Full disclosure of any changes to Directors’
salaries will be provided in next year’s Directors’ Remuneration Report at the latest.
Pension and benefits
Executive Directors’ pension provision will continue unchanged. Pension contributions
for Sir Martin Sorrell and Mary Basterfield will be at a rate of 4% of basic salary.
Benefits provided will be similar to those provided in 2024.
Remuneration Report continued
Annual bonus
The Committee has decided that the annual bonus scheme for 2025 will operate in
a broadly similar manner to that in place for 2024. 75% of the bonus will again be
payable by reference to performance measured against financial metrics, including net
revenue, EBITDA, EBITDA margin and EBITDA to cash conversion. The remaining 25%
will be payable by reference to key non-financial objectives, including ESG and DE&I
performance, and measures linked to the ongoing integration of the various businesses
within S4Capital and the increased use of AI across the business. The specific targets
are currently considered commercially confidential but full details will be disclosed in next
year’s Remuneration Report after the end of the performance period. The maximum bonus
opportunity for 2025 will remain at 100% of basic salary. Any bonus payment for Mary
Basterfield will be pro-rated to reflect her period of service.
The bonus scheme includes the discretion to adjust formulaic outcomes as well as recovery
and withholding provisions, as summarised in the Directors’ Remuneration Policy.
Share incentives
Mary Basterfield will receive a further award of shares in 2025 with a face value at grant
of £500,000, being the final award under the terms of the agreement reached with Mary
at the time of her appointment in 2021. This award will be subject to the satisfaction of
targets based on key performance conditions measured over the financial year ending
31 December 2025. As for 2024, the precise performance targets will mirror those for the
annual bonus scheme. The targets are considered commercially confidential and will be
disclosed in next year’s Directors’ Remuneration Report. To the extent that the performance
targets are satisfied, the award will vest on a pro-rata basis in August 2026, this being four
years after the grant of the first award under these arrangements. The award will be split
equally between market-priced options and conditional shares.
At this stage the Committee has not made any final decisions regarding the potential grant
of long-term incentive awards to Executive Directors in 2025. Any awards will be consistent
with the terms of the Directors’ Remuneration Policy, with full details provided in next year’s
Remuneration Report.
Non-Executive Directors
The Non-Executive Directors receive a base fee of £50,000, with an additional fee of
£10,000 paid the Senior Independent Director and the Chair of the Nomination and
Remuneration Committee, and an additional £12,500 paid to the Chair of the Audit and Risk
Committee. The Board has not yet reached a final decision on any fee increases for 2025.
Any changes to fee levels will be disclosed in next year’s Directors’ Remuneration Report.
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Directors’ Report
S4Capital plc is incorporated and domiciled in the UK and is registered in England and
Wales with the registered number 10476913. The correspondence address and registered
office of the Company is 12 St James’s Place, London SW1A 1NX.
This report has been drawn up and presented in accordance with, and in reliance upon,
applicable English law and the liabilities of the Directors in preparing this report shall be
subject to the limitations and restrictions provided by such law. The Director’s Report is
designed to inform shareowners and help them assess how the Directors have performed
their duty to promote the success of the Company.
Strategic Report and Corporate Governance
The Strategic Report can be found on pages 7 to 24 and 51 to 56 and is included by
reference into this Directors’ Report. The Strategic Report sets out the development and
performance of the Group’s business during the financial year, the position of the Group
at the end of the period, an outlook containing an indication of future developments
within the industry, a description of the principal risks and uncertainties facing the Group,
details of the Group’s Diversity, Equity & Inclusion Policy and reporting of ESG activities.
The Strategic Report also sets out a summary of how the Directors have engaged with
our people as well as how the Directors have had regard to the need to foster the Group’s
business relationships with suppliers, clients and others, in line with Section 172 (page 52).
The other sections of the Group’s Governance Report are also included by reference into
this report.
Directors and their interests
Biographies of the Directors who served on the Board during the year ended 31 December
2024 and up to the date of signing of the financial statements are set out on pages 60
to 63. As set out in the Notice of Annual General Meeting, all the Directors will retire at
this year’s Annual General Meeting (AGM) and, with the exception of Mary Basterfield,
will submit themselves for election and re-election by shareowners. All Directors seeking
appointment and reappointment were subject to a formal and rigorous performance
evaluation, further details of which can be found on pages 71 and 72. Details of Directors’
service contracts are set out in the Directors’ Remuneration Report on page 88.
The interests of the Directors in the shares of the Company are also shown on page 95 of
that report.
Other than the Incentive Shares held by Sir Martin Sorrell (as disclosed on page 96,
no Directors have beneficial interests in the shares of any subsidiary company.
Dividend
No dividend was declared or paid in during the year to 31 December 2024. The Directors
are proposing that, subject to shareowner approval, a final dividend of 1 pence per share
be paid on 10 July 2025 to all shareowners on the record on 6 June 2025 (2023: £nil).
Capital structure
As at 23 March 2025, the Company’s issued share capital comprised of 619,636,656
Ordinary Shares of £0.25 each and one B Share of £1.00. 6,000,000 Ordinary Shares are
currently held in treasury. The Company was authorised at the 2024 AGM to allot up to
194,497,148 Ordinary Shares as permitted by the Act. A renewal of a similar authority will be
proposed at the 2025 AGM. The Company’s issued share capital as at 31 December 2024,
together with details of shares issued during the year, is set out in note 21 to the Financial
Statements on page 148.
The holders of Ordinary Shares are entitled to receive dividends as declared from time to
time and are entitled to one vote per share at general meetings of the Company. The holder
of the B Share has no right to receive dividends and is entitled to one vote at general
meetings of the Company when voting in favour of resolutions, and such number of votes
as may be required to defeat the relevant resolution when voting against.
Any appointment and removal of a Director requires the consent of Sir Martin Sorrell as the
holder of the B Share. The processes for the appointment and replacement of Directors are
governed by the Company’s Articles of Association, the 2018 UK Corporate Governance
Code, the Companies Act 2006 and related legislation. The powers of Directors are
described in the Articles, which can be found on our website.
Restrictions on transfer of securities
The Ordinary Shares are freely transferable and there are no restrictions on transfer.
Except for Sir Martin Sorrell, who holds the B Share. No other person holds securities in the
Company carrying special rights with regard to control of the Company. The Company is
not aware of any agreements between holders of securities that may result in restrictions
on the transfer of securities or voting rights.
Articles of Association
The Company’s Articles were adopted at the 2022 Annual General Meeting (AGM) and may
only be amended by a special resolution of the shareowners. The Articles can be found on
our website, www.s4capital.com.
Authority to purchase shares
The Company was given authority at its AGM in 2024 to make market purchases of
Ordinary Shares up to a maximum number of 58,349,144 Ordinary Shares. During the
year 6,000,000 Ordinary Shares were repurchased, which are held as treasury shares
in accordance with the provisions of the Companies Act 2006.
The Directors believe that it is desirable to have the general authority to buy back the
Company’s Ordinary Shares in order to provide maximum flexibility in the management of
the Group’s capital resources, and accordingly, propose to renew these authorities at the
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Financial statements
Directors’ Report continued
2025 AGM for a further year. This authority will only be used if the Board was satisfied at
the time that to do so would be in the best interests of shareowners.
Insurance and indemnities
The Company maintains Directors’ and Officers’ liability insurance in respect of legal action
that might be brought against its Directors and Officers. As permitted by the Company’s
Articles of Association (the ‘Articles’), and to the extent permitted by law, the Company
indemnifies each of its Directors and other Officers of the Group against certain liabilities
that may be incurred as a result of their positions with the Group. The indemnities were in
force throughout the tenure of each Director during the last financial year and are currently
in force. The Group’s financial risk management policies and objectives can be found in
Note 20 on page 144 of the financial statements.
Substantial shareholders
As at 31 December 2024 and 23 March 2025, the Company has received notification
of the following interest in voting rights pursuant to the Disclosure Guidance and
Transparency Rules:
Number of Shares
% shareholding
Sir Martin Sorrell1
54,229,594
9.442
Oro en Fools B.V.
35,092,132
6.110
Patient Capital Management
29,968,483
5.150
The Capital Group Companies
28,979,522
4.970
Note:
1. In addition, Sir Martin Sorrell has, in aggregate, donated 3,910,000 Ordinary Shares to the UBS Donor
Advised Foundation.
Employees
The Board recognises the importance of attracting, developing and retaining the best
people. In accordance with best practice, we have employment policies in place which
provide equal opportunities for all employees, irrespective of age, sex, race, colour,
disability, sexual orientation, religious beliefs, socio-economic background education
and professional backgrounds or marital status. The Group also materially complies with
all applicable national and international human and labour rights within the locations
in which it operates. Further information on the Board’s methods for engaging with the
workforce is on page 73.
Significant agreements
The Group’s term loan and revolving facility contain customary prepayment, cancellation
and default provisions including, if required by a lender, mandatory prepayment of all
utilisations provided by that lender upon the sale of all or substantially all of the business
and assets of the Group or a change of control. The Company does not have agreements
with any Director that would provide compensation for loss of office or employment
resulting from a takeover except for provisions, which may cause awards granted under
such arrangements to vest on a takeover.
Political donations
The Group’s policy prohibits any donations being made for or on behalf of the Group for
political purposes, accordingly, the Group did not make any donations or contributions to
any political party or other political organisation and did not incur any political expenditure
within the meanings of sections 362 to 379 of the Companies Act 2006.
Independent auditors
PricewaterhouseCoopers LLP has confirmed its willingness to continue as auditors of the
Group. In accordance with section 489 of the Companies Act 2006, separate resolutions
for the appointment of PricewaterhouseCoopers LLP as auditors of the Group and for
the Directors to determine its remuneration will be proposed at the forthcoming AGM of
the Company.
The Directors who held office at the date of approval of this Directors’ Report confirm that,
so far as they are each aware, there is no relevant audit information of which the Company’s
auditor is unaware and that each Director has taken all the steps that they ought to have
taken as a Director to make themselves aware of any relevant audit information and ensure
that the auditor is aware of such information.
This confirmation is given and should be interpreted in accordance with the provisions of
section 418 of the Companies Act 2006.
Post balance sheet events
On the 23 March 2025 the Board proposed a final dividend of 1p per share, amounting to
£6.1 million, subject to shareowner approval. This will be paid on 10 July 2025 to all
shareowners on the register as at 6 June 2025.
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Directors’ Report continued
Annual General Meeting
The AGM of the Company will be held at midday on 4 June 2025 at Monks, 15 Bonhill
Street, London, EC2A 4DN. For participation details please refer to the Notice of AGM
which will be posted to shareowners and available on our website www.s4capital.com
in due course.
Statement of Directors’ responsibilities in respect of the
financial statements
The Directors are responsible for preparing the Annual Report and the financial statements
in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year.
Under that law the Directors have prepared the Group financial statements in accordance
with UK-adopted international accounting standards and the Company financial statements
in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 ‘Reduced Disclosure Framework’,
and applicable law).
Under company law, Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the Group and Company
and of the profit or loss of the Group for that period. In preparing the financial statements,
the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable UK-adopted international accounting standards have been
followed for the Group financial statements and United Kingdom Accounting Standards,
comprising FRS 101 have been followed for the Company financial statements, subject to
any material departures disclosed and explained in the financial statements;
• make judgements and accounting estimates that are reasonable and prudent; and
• prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group and Company will continue in business.
The Directors are responsible for safeguarding the assets of the Group and Company
and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are also responsible for keeping adequate accounting records that are
sufficient to show and explain the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the Group and Company and
enable them to ensure that the financial statements and the Directors’ Remuneration
Report comply with the Companies Act 2006.
Directors’ confirmations
Each of the Directors, whose names and functions are listed in the Governance Report
confirm that, to the best of their knowledge:
• the Group financial statements, which have been prepared in accordance with UK-
adopted international accounting standards, give a true and fair view of the assets,
liabilities, financial position and loss of the Group;
• the Company financial statements, which have been prepared in accordance with United
Kingdom Accounting Standards, comprising FRS 101, give a true and fair view of the
assets, liabilities and financial position of the Company; and
• the Strategic Report includes a fair review of the development and performance of the
business and the position of the Group and Company, together with a description of the
principal risks and uncertainties that it faces.
In the case of each Director in office at the date the Directors’ Report is approved:
• so far as the Director is aware, there is no relevant audit information of which the Group’s
and Company’s auditors are unaware; and
• they have taken all the steps that they ought to have taken as a Director in order to make
themselves aware of any relevant audit information and to establish that the Group’s and
Company’s auditors are aware of that information.
On behalf of the Board:
Sir Martin Sorrell
Executive Chairman
23 March 2025
Mary Basterfield
Group Chief Financial Officer
23 March 2025
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5
Financial
statements
Independent auditors’ report
105
Consolidated statement of profit or loss
114
Consolidated statement of comprehensive income
115
Consolidated balance sheet
116
Consolidated statement of changes in equity
117
Consolidated statement of cash flows
118
Notes to the consolidated financial statements
119
Company balance sheet
158
Company statement of changes in equity
159
Notes to the Company financial statements
160
Appendix: Alternative Performance Measures
164
Shareowner information
169
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Financial statements
Independent auditors’ report to the members of S4Capital plc
Report on the audit of the financial statements
Opinion
In our opinion:
• S4Capital plc’s group financial statements and company financial statements (the “financial
statements”) give a true and fair view of the state of the group’s and of the company’s
affairs as at 31 December 2024 and of the group’s loss and the group’s cash flows for the
year then ended;
• the group financial statements have been properly prepared in accordance with UK-
adopted international accounting standards as applied in accordance with the provisions
of the Companies Act 2006;
• the company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements, included within the Annual Report and
Accounts 2024 (the “Annual Report”), which comprise: the Consolidated and Company
balance sheets as at 31 December 2024; the Consolidated statement of profit or loss,
the Consolidated statement of comprehensive income, the Consolidated and Company
statements of changes in equity and the Consolidated statement of cash flows for the year
then ended; and the notes to the financial statements, comprising material accounting
policy information and other explanatory information.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK)
(“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial statements section of our
report. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical
Standard, as applicable to listed public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by
the FRC’s Ethical Standard were not provided.
Other than those disclosed in Note 6, we have provided no non-audit services to the
company or its controlled undertakings in the period under audit.
Our audit approach
Context
S4Capital plc is a United Kingdom-based public company limited by shares. S4Capital Group’s
principal activities are focused on the provision of tech-led, new age/new era digital
advertising, marketing and technology services via three operating segments: Content,
Data & Digital Media (DDM) and Technology Services (TS). Following the acquisition in prior
years of a number of businesses the Group has significant goodwill and intangible assets
and it is now focussed on integrating the acquired businesses. There is also a significant
investment value held on the company balance sheet relating to these acquisitions.
Within the Group’s business operations, there are material fixed fee contracts which require
judgement in revenue recognition. We have considered these factors in our risk assessment
and designed appropriate audit procedures in response to the related identified risks.
Further details regarding our audit procedures over management’s impairment assessment
and revenue recognition on fixed fee contracts are set out within our key audit matters.
Overview
Audit scope
• Our audit encompassed full scope audits of 6 components. Additionally, we conducted
specified procedures over specific account balances for 11 components; and
• Taken together, the components subjected to audit and specified procedures accounted
for 79% of the Group’s consolidated revenue.
Key audit matters
• Impairment of goodwill and intangible assets (group)
• Impairment of investment in subsidiary (company)
• Accuracy of revenue recognition on fixed fee contracts (group)
Materiality
• Overall group materiality: £8.2 million (2023: £10.0 million) based on approximately 1%
of revenue.
• Overall company materiality: £6.0 million (2023: £11.1 million) based on approximately 1%
of total assets.
• Performance materiality: £6.15 million (2023: £6.5 million) (group) and £4.7 million
(2023: £7.25 million) (company).
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Independent auditors’ report to the members of S4Capital plc continued
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of
most significance in the audit of the financial statements of the current period and include
the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters, and any comments we make on the results of our
procedures thereon, were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Impairment of goodwill and intangible assets (group)
At 31 December 2024, the Group had goodwill of £391.2 million
(2023: £691.3 million) and intangible assets of £315.2 million
(2023: £381.6 million), following the recognition of impairment charges
during the year of £280.4 million to goodwill and £20.8 million to
intangible assets.
The annual goodwill impairment assessment was performed as at
30 September 2024.
The determination of whether an impairment exists can be judgemental.
Management must determine the recoverable amount when impairment
indicators are identified or annually where a CGU contains goodwill.
The determination of recoverable amount, being the higher of value-
in-use (“VIU”) and fair value less costs of disposal (“FVLCD”), requires
judgement and estimation on the part of management in identifying
and then determining the recoverable amounts for the relevant CGUs.
The recoverable amounts were calculated on a VIU basis incorporating
management’s view of key assumptions which include net revenue growth
rates and EBITDA margins.
Management concluded that there was impairment in goodwill in the
Content CGU and in goodwill and intangible assets in the Technology
Services CGU. Whilst no impairment was identified in the DDM CGU,
this conclusion was found to be sensitive to changes to key assumptions.
Refer to the accounting policies section within the financial statements for
disclosure of the related accounting policies, judgements and estimates,
Note 10 for detailed goodwill disclosures and Note 11 for detailed intangible
asset disclosures within the consolidated financial statements.
With respect to goodwill, our audit procedures focused on challenging and evaluating the discount rates,
short-term forecasts and long-term growth rates used in the respective discounted cash flow models to
determine the recoverable amount of each CGU and included the following audit procedures:
• assessed the appropriateness of management’s identification of the Group’s CGUs;
• verified the integrity of the formulae and the mathematical accuracy of management’s valuation models;
• held discussions with the finance team leaders responsible for forecasts and with a sample of account
managers who had prepared the underlying account budgets in each practice, in order to evaluate the
Group’s cash flow forecasts, and the process by which they were prepared;
• held discussions with Group executives responsible for growth and transformation programmes to
corroborate the progress of these initiatives and the impact on cash flow forecasts;
• confirmed that the forecasts used in management’s impairment test were approved by the board of
directors and assessed the reasonableness of the revenue, costs and margins included in those forecasts
based on our understanding of the Group and its past performance, including the impact of climate change;
• assessed management’s forecasts against external market indicators such as wider digital advertising
growth trends and independent analyst reports;
• evaluated management’s ability to accurately forecast future revenues and growth rates by comparing
actual results to management’s historical forecasts;
• with the assistance of our valuations specialists, we assessed the discount rates and long term growth
rates used in the models and whether the rates fell within a reasonable range taking into consideration both
internal and external market data;
• performed sensitivity analysis through varying key assumptions based on findings from the
above procedures;
• evaluated the Group’s disclosures on goodwill and intangible assets and related impairments against the
requirements of UK-adopted international accounting standards.
Based on the procedures performed, we noted no material issues arising from our work.
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Independent auditors’ report to the members of S4Capital plc continued
Key audit matter
How our audit addressed the key audit matter
Impairment of investment in subsidiary (company)
At 31 December 2024, the Company held investments in its subsidiary
amounting to £597.3 million (2023: £1.11 billion), following the recognition
of an impairment charge in the year of £522.7 million (2023: nil).
The investment in subsidiary is accounted for at historical cost less
accumulated impairment. Judgement is required to assess if impairment
triggers exist and where triggers are identified, if the investment carrying
value is supported by the recoverable amount. In assessing impairment
triggers, management considers if the underlying net assets of the
investment support the carrying amount and whether other facts and
circumstances would be indicative of a trigger.
Management identified indications of impairment in their annual
impairment assessment of Group goodwill and intangibles as described
above. Following this, management performed an impairment test to
determine whether the recoverable amount exceeded the carrying
amount of the company’s investment in the subsidiary.
The determination of recoverable amount, being the higher of value-in-use
(“VIU”) and fair value less costs of disposal (“FVLCD”), requires estimation
on the part of management in determining the recoverable amount of
the subsidiary. The recoverable amount was calculated on a VIU basis
incorporating management’s view of key assumptions which include net
revenue growth rates and EBITDA margins. Management concluded that
there was impairment in the investment in subsidiary.
Refer to the accounting policies section within the financial statements
for disclosure of the related accounting policies, judgements and
estimates and Note 1 to the company financial statements for detailed
impairment disclosures.
In respect of the Company’s investment in subsidiary, we performed the following procedures over
management’s impairment test:
• evaluated management’s assessment of impairment indicators for the investment in subsidiary including
ensuring that consideration had been given to the results of the Group’s goodwill impairment assessment
(see impairment of goodwill and intangible assets Key audit matter above);
• evaluated the appropriateness of management’s assessment and judgements to calculate value in use in
conjunction with the goodwill and intangible impairment test referred to in the above key audit matter;
• verified the mathematical accuracy of management’s assessment and that the cash flows used for the value
in use calculation were adjusted for the contractual cash outflows relating to the outstanding debt; and
• evaluated the disclosures in Note 1 of the Company financial statements.
Based on the procedures performed, we noted no material issues arising from our work.
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Key audit matter
How our audit addressed the key audit matter
Accuracy of revenue recognition on fixed fee contracts (group)
The Group often enters fixed price contracts under which obligations
(such as the delivery of creative content) are promised to a customer for a
specific contractual price. Assessing the timing of revenue recognised on
fixed fee contracts at year-end is an area of complexity and judgement is
required in identifying performance obligations and whether the revenue
should be recognised over time or at a point in time. Further, estimation is
required in assessing the stage of delivery of performance obligations on
open contracts where revenue is recognised over time.
Given the complexity in estimation and judgement involved, the timing
of revenue recognition and the accuracy of fixed fee contract revenue
recognised in the financial statements is subject to both risk of error and
fraud as there is an incentive for management to manipulate the results
by allocating revenues attributable to future periods into 2024 in order to
achieve targets.
These factors led us to identify the revenue recognition for fixed fee
contracts open as at 31 December 2024 as a key audit matter.
Auditing these estimates requires extensive audit effort and a high degree
of judgement given the bespoke nature of each contract and the variety
of evidence needing to be assessed in order to support the percentage
of completion determined. Refer to the accounting policies section
within the financial statements for disclosure of the related accounting
policies, judgements and estimates and Note 5 of the consolidated
financial statements.
Our audit procedures to address the significant risk in relation to the accuracy of revenue recognition on fixed
fee contracts included the following:
• We obtained an understanding of and performed walkthroughs of the controls over revenue recognition
including the revenue recognition on fixed fee contracts. This included a walkthrough of controls related to
management’s assessment of IFRS 15 ‘Revenue from contracts with customers’;
• We assessed the revenue accounting policy to ensure it was consistent with the principles of IFRS 15
and in particular the correct application of IFRS 15 with regards to recognising revenue over time;
• We evaluated the accuracy of management’s previous estimates of stage of completion and forecasts of
effort to complete projects by performing retrospective reviews of such estimates as compared to actual
results for performance obligations that have been fulfilled;
• We selected a sample of contracts with customers and performed the following audit procedures;
– assessed contractual terms (e.g. acceptance criteria, delivery and payment terms) to ensure that these
terms were applied correctly within each project;
– evaluated the reasonableness and consistency of the methods and assumptions used by management
to develop the estimate with respect to the effort to complete and stage of delivery of the relevant
performance obligations;
– considered whether there was any evidence which contradicted management’s assumptions regarding
the percentage of completion and the estimated effort to complete; and
– recalculated revenue recognised based on the proportion of the service performed in respect of each
performance obligation by obtaining support for service delivery or schedules of estimated effort to
complete from project managers and challenging the key supporting evidence to test its completeness
and accuracy.
Based on the procedures performed, we noted no material issues arising from our work.
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How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to
give an opinion on the financial statements as a whole, taking into account the structure
of the group and the company, the accounting processes and controls, and the industry in
which they operate.
The Group is organised into three reportable segments – Content, DDM and TS. The Group’s
accounting processes for its operations are structured around a local finance function
at each component, which are supported by the practice finance team and the Group’s
central functions in the United Kingdom. Each component reports to the Group through an
integrated consolidation system. For the purposes of our scoping, we have also considered
the levels at which management prepared aggregated financial information.
We scoped in 6 components requiring an audit of their complete financial information,
of which 5 were considered to be significant due to risk or size. Of the 5 significant
components, 4 were audited by our component teams in the US and Germany and 1 by the
group engagement team.
In addition, 11 components were scoped in for the performance of specified procedures
over specific account balances and transactions to obtain appropriate coverage of all
material balances. Specified procedures were performed for these components by the
group engagement team along with PwC component auditors in Argentina, Colombia,
France, and Brazil.
Taken together, the components subjected to audit and specified procedures accounted
for 79% of the Group’s consolidated revenue.
The group engagement team were significantly involved at all stages of the component
audits by virtue of numerous communications throughout, including the issuance of
detailed audit instructions and review and discussions of the audit approach and findings,
in particular over our areas of focus. This also involved regular component calls through
video conferencing. The group engagement team met with local management and the
component audit teams and attended their interim and completion clearance meetings.
The group engagement team members visited component teams in the US, Argentina, France
and Brazil as part of our oversight procedures. In addition, we reviewed the component team
reporting results and their supporting working papers, which together with the additional
procedures performed at group level, gave us the evidence required for our opinion on the
financial statements as a whole. We performed centralised audit procedures over consolidation,
goodwill and intangible assets impairment assessment, right of use assets and lease liabilities,
cash and cash equivalents (for components not in scope for full scope audit or specified audit
procedures), share-based payments and borrowings.
The financial statements of the Company are prepared using the same accounting
processes and controls as the Group’s central functions and were audited by the group
engagement team. This includes the procedures performed in relation to impairment of
investment in subsidiary as explained in the key audit matters section above.
The impact of climate risk on our audit
As part of our audit, we made enquiries of management to understand their process to
assess the extent of the potential impact of climate change on the Group and its financial
statements. The Group explains the impact of climate change on its business within the
‘Sustainability Statement’.
As a result of our procedures, we concluded that the key areas in the financial statements
which are more likely to be materially impacted by climate change are those areas that are
based on forecast cash flows. As such, we particularly considered how the commitments
made by the Group would impact the assumptions made in the forecasts prepared by
management that are used in the Group’s impairment assessment, for assessing both the
recoverability of goodwill and intangible assets and the investment held by the Company.
We did not identify any matters as part of this work which were inconsistent with the
disclosures in the Annual Report or led to any material adjustments to the accounts.
Our procedures included reading the disclosures in relation to climate change within the
Annual Report and considering its consistency with the financial statements and our
knowledge from the audit. We did not identify any material impact on our key audit matters
or the wider audit for the year ended 31 December 2024.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain
quantitative thresholds for materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature, timing and extent of our
audit procedures on the individual financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and in aggregate on the financial
statements as a whole.
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Based on our professional judgement, we determined materiality for the financial
statements as a whole as follows:
Financial statements – Group
Financial statements – Company
Overall materiality
£8.2 million (2023: £10.0 million)
£6.0 million (2023: £11.1 million)
How we
determined it
approximately 1% of revenue
approximately 1% of total assets
Rationale for
benchmark
applied
We have consistently used revenue
to determine materiality as opposed
to a profit based benchmark as there
is considerable volatility in profit
before tax. Revenue continues to be
a key performance metric for the
group and is considered to be more
stable than a profit based metric.
We considered the total assets to
be an appropriate benchmark for
the Company, given that it is the
ultimate holding company and
holds a material investment in
a subsidiary undertaking.
Total assets is also a generally
accepted auditing benchmark.
For each component in the scope of our group audit, we allocated a materiality that is less
than our overall group materiality. The range of materiality allocated across components
was between £0.8 million and £7.3 million. Certain components were audited to a local
statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that
the aggregate of uncorrected and undetected misstatements exceeds overall materiality.
Specifically, we use performance materiality in determining the scope of our audit and the
nature and extent of our testing of account balances, classes of transactions and disclosures,
for example in determining sample sizes. Our performance materiality was 75% (2023: 65%)
of overall materiality, amounting to £6.15 million (2023: £6.5 million) for the group financial
statements and £4.7 million (2023: £7.25 million) for the company financial statements.
In determining the performance materiality, we considered a number of factors – the history
of misstatements, risk assessment and aggregation risk and the effectiveness of controls –
and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements
identified during our audit above £410,000 (group audit) (2023: £500,000) and £315,000
(company audit) (2023: £500,000) as well as misstatements below those amounts that,
in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to
continue to adopt the going concern basis of accounting included:
• reading management’s paper to the Audit and Risk Committee in respect of going
concern, and agreeing the forecasts set out in this paper to the underlying base case
cash flow model and board approved budgets;
• obtaining and examining management’s base case and severe but plausible
downside scenarios;
• evaluating the key assumptions within management’s forecasts and applying our own
independent sensitivities based on our knowledge from the audit and assessment of
previous forecasting accuracy;
• considering the historical reliability of management’s forecasting for cash flows and net
debt by comparing budgeted results to actual performance;
• assessing the level of remaining liquidity available to the Group under both the base case
and severe but plausible downside scenario;
• identifying the covenants applicable to the Group’s borrowings and auditing whether
management’s assessment supports ongoing compliance with those covenants under
both base case and severe but plausible downside scenarios;
• evaluating the appropriateness of management’s mitigating actions considered in the
severe but plausible downside scenario; and
• considering the appropriateness of the disclosure given in note 2C to the consolidated
financial statements.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt
on the group’s and the company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not
a guarantee as to the group’s and the company’s ability to continue as a going concern.
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In relation to the directors’ reporting on how they have applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in relation to the
directors’ statement in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern
are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the
financial statements and our auditors’ report thereon. The directors are responsible for
the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to
conclude whether there is a material misstatement of the financial statements or a
material misstatement of the other information. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether the
disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires
us also to report certain opinions and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information
given in the Strategic report and Directors’ report for the year ended 31 December 2024
is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the group and company and their
environment obtained in the course of the audit, we did not identify any material
misstatements in the Strategic report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Corporate governance statement
ISAs (UK) require us to review the directors’ statements in relation to going concern, longer-
term viability and that part of the corporate governance statement relating to the company’s
compliance with the provisions of the UK Corporate Governance Code, which the Listing
Rules of the Financial Conduct Authority specify for review by the auditor. Our additional
responsibilities with respect to the corporate governance statement as other information
are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the
following elements of the corporate governance statement, included within the Governance
Report is materially consistent with the financial statements and our knowledge obtained
during the audit, and we have nothing material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the
emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures
are in place to identify emerging risks and an explanation of how these are being
managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it
appropriate to adopt the going concern basis of accounting in preparing them, and their
identification of any material uncertainties to the group’s and company’s ability to
continue to do so over a period of at least twelve months from the date of approval of the
financial statements;
• The directors’ explanation as to their assessment of the group’s and company’s
prospects, the period this assessment covers and why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the
company will be able to continue in operation and meet its liabilities as they fall due over
the period of its assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group
and company was substantially less in scope than an audit and only consisted of making
inquiries and considering the directors’ process supporting their statement; checking that
the statement is in alignment with the relevant provisions of the UK Corporate Governance
Code; and considering whether the statement is consistent with the financial statements
and our knowledge and understanding of the group and company and their environment
obtained in the course of the audit.
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In addition, based on the work undertaken as part of our audit, we have concluded that
each of the following elements of the corporate governance statement is materially
consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is
fair, balanced and understandable, and provides the information necessary for the
members to assess the group’s and company’s position, performance, business model
and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk
management and internal control systems; and
• The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the directors’
statement relating to the company’s compliance with the Code does not properly disclose
a departure from a relevant provision of the Code specified under the Listing Rules for
review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the
financial statements, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that
they give a true and fair view. The directors are also responsible for such internal control
as they determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the
group’s and the company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or the company or to cease operations,
or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal
risks of non-compliance with laws and regulations related to employment, health and
safety regulations and data protection regulations (including the General Data Protection
Regulation), and we considered the extent to which non-compliance might have a material
effect on the financial statements. We also considered those laws and regulations that
have a direct impact on the financial statements such as tax legislation and Companies
Act 2006. We evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of controls),
and determined that the principal risks were related to posting inappropriate journal
entries to increase revenue or profits and management bias within accounting estimates.
The group engagement team shared this risk assessment with the component auditors
so that they could include appropriate audit procedures in response to such risks in their
work. Audit procedures performed by the group engagement team and/or component
auditors included:
• Understanding and evaluating the design and implementation of controls designed to
prevent and detect fraud;
• Inquiry of management, the Audit and Risk Committee, Internal Audit and the Group’s
internal legal counsel regarding their consideration of known or suspected instances of
non-compliance with laws and regulations and fraud;
• Assessment of the Group’s whistleblowing facility and matters reported through
the facility;
• Identifying and testing journal entries, in particular any journal entries posted with
unusual account combinations;
• Identifying and testing intercompany balances to ensure they were genuine and were
eliminated appropriately within the consolidated financial statements; and
• Challenging assumptions and judgements made by management in respect of critical
accounting judgements and significant accounting estimates, and assessing these
judgements and estimates for management bias.
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There are inherent limitations in the audit procedures described above. We are less
likely to become aware of instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected in the financial statements.
Also, the risk of not detecting a material misstatement due to fraud is higher than the risk
of not detecting one resulting from error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and
balances, possibly using data auditing techniques. However, it typically involves selecting a
limited number of items for testing, rather than testing complete populations. We will often
seek to target particular items for testing based on their size or risk characteristics. In other
cases, we will use audit sampling to enable us to draw a conclusion about the population
from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is
located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s
members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and
for no other purpose. We do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for
our audit have not been received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the company financial statements and the part of the Remuneration Report to be audited
are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we were appointed
by the members on 28 January 2019 to audit the financial statements for the year
ended 31 December 2018 and subsequent financial periods. The period of total
uninterrupted engagement is seven years, covering the years ended 31 December 2018
to 31 December 2024.
Other matter
The company is required by the Financial Conduct Authority Disclosure Guidance and
Transparency Rules to include these financial statements in an annual financial report
prepared under the structured digital format required by DTR 4.1.15R – 4.1.18R and filed on
the National Storage Mechanism of the Financial Conduct Authority. This auditors’ report
provides no assurance over whether the structured digital format annual financial report
has been prepared in accordance with those requirements.
Jason Burkitt (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
23 March 2025
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Financial statements
Consolidated statement of profit or loss
For the year ended 31 December 2024
Notes
2024
£m
2023
Restated1
£m
Revenue
5
848.2
1,011.5
Direct costs
(93.6)
(138.3)
Net revenue
754.6
873.2
Personnel costs
6
(581.5)
(670.8)
Other operating expenses
6
(78.7)
(92.6)
Acquisition, restructuring and other one-off expenses
6
(23.8)
(11.9)
Depreciation, amortisation and impairment
6
(373.5)
(77.9)
Share of profit of joint venture and associates
14
0.1
0.2
Total operating expenses
(1,057.4)
(853.0)
Operating (loss)/profit
(302.8)
20.2
Adjusted operating profit
78.3
82.0
Adjusting items2
(381.1)
(61.8)
Operating (loss)/profit
(302.8)
20.2
Finance income
7
5.3
2.8
Finance costs
7
(31.7)
(38.2)
Net finance costs
(26.4)
(35.4)
(Loss)/gain on the net monetary position
(1.7)
1.3
Loss before income tax
(330.9)
(13.9)
Income tax credit/(expense)3
8
24.0
(0.4)
Loss for the year
(306.9)
(14.3)
Attributable to owners of the Company
(306.9)
(14.3)
Attributable to non-controlling interests
–
–
(306.9)
(14.3)
Loss per share is attributable to the ordinary equity
holders of the Company
Basic loss per share (pence)
9
(45.7)
(2.2)
Diluted loss per share (pence)
9
(45.7)
(2.2)
Notes:
1. The comparatives for the year ended 31 December 2023 have been restated to account for the recognition of
deferred tax balances related to certain business combinations in prior years (see Note 2).
2. Adjusting items comprises amortisation of £44.3 million (2023: £48.6 million), impairment of intangible assets
of £301.2 million (2023: £nil), acquisition expenses of £1.3 million gain (2023: £9.2 million gain), share-based
payments of £6.5 million (2023: £10.1 million) and restructuring and other one-off expenses of £30.4 million
(2023: £12.3 million).
3. Income tax credit includes £20.8 million credit relating to the deferred tax impact of the impairment charge of
£301.2 million, resulting in a net impairment charge of £280.4 million.
The results for the year are wholly attributable to the continuing operations of the Group.
The accompanying notes on pages 119 to 157 form an integral part of these consolidated
financial statements.
Notes
2024
£m
2023
Restated1
£m
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Consolidated statement of comprehensive income
For the year ended 31 December 2024
2024
£m
2023
Restated1
£m
Loss for the year
(306.9)
(14.3)
Other comprehensive expense
Items that may be reclassified to profit or loss
Foreign operations – foreign currency translation differences
(16.8)
(54.6)
Other comprehensive expense
(16.8)
(54.6)
Total comprehensive expense for the year
(323.7)
(68.9)
Attributable to owners of the Company
(323.7)
(68.9)
Attributable to non-controlling interests
–
–
(323.7)
(68.9)
Note:
1. The comparatives for the year ended 31 December 2023 have been restated to account for the recognition of deferred tax balances related to certain business combinations in prior years (see Note 2).
The accompanying notes on pages 119 to 157 form an integral part of these consolidated financial statements.
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Financial statements
Consolidated balance sheet
At 31 December 2024
Notes
2024
£m
2023
Restated1
£m
2022
Restated1
£m
Assets
Goodwill
10
391.2
691.3
718.8
Intangible assets
11
315.2
381.6
445.2
Right-of-use assets
12
34.7
45.8
55.7
Property, plant and equipment
13
16.4
21.9
29.7
Interest in joint ventures and associates
14
0.8
0.2
–
Deferred tax assets
15
49.0
24.7
14.9
Other receivables
16
9.2
13.7
12.2
Non-current assets
816.5
1,179.2
1,276.5
Trade and other receivables
16
450.8
407.5
442.4
Current tax assets
9.6
4.9
–
Cash and cash equivalents
17
168.4
145.7
223.6
Current assets
628.8
558.1
666.0
Total assets
1,445.3
1,737.3
1,942.5
Liabilities
Deferred tax liabilities
15
(18.6)
(24.1)
(28.5)
Loans and borrowings
19
(307.2)
(320.9)
(326.2)
Lease liabilities
12
(29.7)
(35.8)
(43.1)
Contingent consideration and holdbacks
20
(4.8)
(7.3)
(11.3)
Provisions
(3.5)
(2.7)
(5.7)
Non-current liabilities
(363.8)
(390.8)
(414.8)
Trade and other payables
18
(482.0)
(418.1)
(443.2)
Contingent consideration and holdbacks
20
(4.7)
(18.2)
(177.3)
Loans and borrowings
19
(0.2)
(0.2)
(0.7)
Lease liabilities
12
(12.8)
(13.2)
(15.3)
Provisions
(0.8)
(1.0)
–
Current tax liabilities
(3.5)
(3.9)
(6.0)
Current liabilities
(504.0)
(454.6)
(642.5)
Total liabilities
(867.8)
(845.4)
(1,057.3)
Net assets
577.5
891.9
885.2
Equity
Share capital
154.9
145.9
142.0
Share premium
164.9
80.4
5.9
Other reserves2
70.7
162.7
175.2
Foreign exchange reserves
(22.9)
(6.1)
48.5
Retained earnings
209.8
508.9
513.5
Attributable to owners of the Company
577.4
891.8
885.1
Non-controlling interests
21
0.1
0.1
0.1
Total equity
577.5
891.9
885.2
Notes:
1. The comparatives as at 31 December 2023 and 31 December 2022 have been restated to account for the
recognition of deferred tax balances related to certain business combinations in prior years (see Note 2).
2. During the year the Group completed a share buy-back scheme and purchased 6,000,000 shares for £2.5 million.
The accompanying notes on pages 119 to 157 form an integral part of these consolidated
financial statements.
The consolidated financial statements of S4Capital plc on pages 158 to 163,
Company registration number 10476913, were approved by the Board of Directors
on 23 March 2025 and signed on its behalf by:
Sir Martin Sorrell
Executive Chairman
Mary Basterfield
Group Chief Financial Officer
Notes
2024
£m
2023
Restated1
£m
2022
Restated1
£m
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Financial statements
Consolidated statement of changes in equity
For the year ended 31 December 2024
Notes
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 20233
142.0
5.9
175.2
48.5
478.4
850.0
0.1
850.1
Deferred tax restatement
–
–
–
–
35.1
35.1
–
35.1
Hyperinflation restatement
–
–
2.6
–
–
2.6
–
2.6
Adjusted opening balance
142.0
5.9
177.8
48.5
513.5
887.7
0.1
887.8
Comprehensive expense for the year
Loss for the year3
–
–
–
–
(14.3)
(14.3)
–
(14.3)
Other comprehensive expense
–
–
–
(54.6)
–
(54.6)
–
(54.6)
Total comprehensive expense for the year
–
–
–
(54.6)
(14.3)
(68.9)
–
(68.9)
Transactions with owners of the Company
Business combinations
21
3.9
74.5
(15.7)
–
–
62.7
–
62.7
Share-based payments
23
–
–
0.6
–
9.7
10.3
–
10.3
Share buy-backs
–
–
–
–
–
–
–
–
At 31 December 20233
145.9
80.4
162.7
(6.1)
508.9
891.8
0.1
891.9
At 1 January 2024
145.9
80.4
162.7
(6.1)
508.9
891.8
0.1
891.9
Hyperinflation restatement
–
–
4.5
–
–
4.5
–
4.5
Adjusted opening balance
145.9
80.4
167.2
(6.1)
508.9
896.3
0.1
896.4
Comprehensive expense for the year
Loss for the year
–
–
–
–
(306.9)
(306.9)
–
(306.9)
Other comprehensive expense
–
–
–
(16.8)
–
(16.8)
–
(16.8)
Total comprehensive expense for the year
–
–
–
(16.8)
(306.9)
(323.7)
–
(323.7)
Transactions with owners of the Company
Business combinations
21
9.0
84.5
(94.9)
–
1.8
0.4
–
0.4
Share-based payments
23
–
–
0.9
–
6.0
6.9
–
6.9
Share buy-backs
–
–
(2.5)
–
–
(2.5)
–
(2.5)
At 31 December 2024
154.9
164.9
70.7
(22.9)
209.8
577.4
0.1
577.5
Notes:
1. At the end of the reporting period, the issued and paid up share capital of S4Capital plc consisted of 619,636,656 (2023: 583,064,256) 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 £61.3 million (2023: £156.2 million), made up of the following: TheoremOne for £26.4 million, Raccoon for £17.4 million, XX Artists for
£17.5 million, the treasury shares issued in the name of S4Capital plc to an employee benefit trust for the amount of £0.3 million (2023: £1.2 million), share buy-backs of £2.5 million (2023: £nil) and hyperinflation restatement in Argentina of
£12.0 million (2023: £7.5 million).
3. The comparatives as at 31 December 2023 and 1 January 2023 have been restated to account for the recognition of deferred tax balances related to certain business combinations in the prior periods (see Note 2).
The accompanying notes on pages 119 to 157 form an integral part of these consolidated financial statements.
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Consolidated statement of cash flows
For the year ended 31 December 2024
Notes
2024
£m
2023
£m
Cash flows from operating activities
Loss before income tax
(330.9)
(13.9)
Net finance costs
7
26.4
35.4
Depreciation, amortisation and impairment
6
373.5
77.9
Share-based payments
23
6.8
10.1
Acquisition, restructuring and other one-off expenses
6
23.8
11.9
Employment linked contingent consideration paid1
20
(2.9)
(77.7)
Restructuring and other one-off expenses paid
(21.1)
(20.8)
Share of profit in joint venture
14
(0.1)
(0.2)
Loss/(gain) on the net monetary position
1.7
(1.3)
Other non-cash items
2.0
(9.8)
(Increase)/decrease in trade and other receivables
(44.4)
11.3
Increase/(decrease) in trade and other payables
58.3
(13.1)
Cash flows from operations
93.1
9.8
Income taxes paid
(9.0)
(20.5)
Net cash flows generated from/(used in) operating activities
84.1
(10.7)
Cash flows from investing activities
Purchase of intangible assets
11
(4.2)
(2.1)
Purchase of property, plant and equipment
13
(4.0)
(5.9)
Proceeds from disposal of property, plant and equipment
0.1
–
Acquisition of subsidiaries, net of cash acquired1
(7.0)
(3.1)
Interest received
2.1
–
Dividends from joint venture
0.2
–
Amounts withdrawn from/(paid into) security deposits
0.5
(2.2)
Cash flows used in investing activities
(12.3)
(13.3)
Notes
2024
£m
2023
£m
Cash flows from financing activities
Proceeds from issuance of shares
–
0.2
Share buy-backs
(2.5)
–
Principal element of lease payments
12
(12.7)
(16.3)
Repayments of loans and borrowings
19
(0.2)
(0.2)
Interest and facility fees paid
(29.1)
(26.7)
Cash flows used in financing activities
(44.5)
(43.0)
Net movement in cash and cash equivalents
27.3
(67.0)
Cash and cash equivalents at the beginning of the year
17
145.7
223.6
Exchange loss on cash and cash equivalents
(4.6)
(10.9)
Cash and cash equivalents at the end of the year
17
168.4
145.7
Note:
1. Acquisitions of subsidiaries comprises contingent consideration and holdback payments, net of cash released from
escrow accounts of £3.3million (2023: £2.6 million). Employment linked contingent consideration paid is net of cash
released from escrow accounts of £0.6 million (2023: £nil).
The accompanying notes on pages 119 to 157 form an integral part of these consolidated
financial statements.
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Financial statements
Notes to the consolidated financial statements
1.
General information
S4Capital plc (‘S4Capital’ or ‘Company’), is a public Company on the London Stock
Exchange, limited by shares, incorporated on 14 November 2016 in England, United
Kingdom. The Company has its registered office at 12 St James’s Place, London, SW1A
1NX, United Kingdom. The new UK Listing Rules, which came into force on 29 July 2024,
have removed the distinction between standard and premium listing categories, which are
now categorised as equity shares commercial companies (ESCC). As at the date of
approval of the consolidated financial statements, S4Capital plc is in the equity shares
(transition) category.
The consolidated financial statements represent the results of the Company and all
its subsidiaries (together referred to as ‘S4Capital Group’ or the ‘Group’). An overview
of the subsidiaries is included in Note 28. S4Capital Group’s principal activities are
focused on the provision of tech-led, new age/new era digital advertising, marketing and
technology services.
2.
Basis of preparation
A.
Statement of compliance
The financial statements of S4Capital plc have 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 and disclosure
guidance and transparency rules sourcebook of the United Kingdom’s Financial
Conduct Authority.
The consolidated financial statements were authorised for issue by the Board of Directors
on 23 March 2025.
B.
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured
using the currency of the primary economic environment in which the entity operates (the
functional currency). The consolidated financial statements are presented in Pound Sterling
(£ or GBP), S4Capital plc’s functional currency. All financial information in Pound Sterling
has been rounded to the nearest million, unless otherwise indicated, for both current and
prior years.
C.
Basis of measurement
The consolidated financial statements are prepared on a going concern basis.
The consolidated financial statements are prepared on the historical cost basis,
except for the fair value measurement of contingent considerations and holdbacks.
The accounting principles have been consistently applied over the reporting periods.
Going concern
The Board has examined the Group’s cash flow projections for the next twelve months,
under both base and a severe yet plausible downside scenario. These assessments take
into account uncertainties such as inflation, decreased demand, and the potential impacts
of these uncertainties on growth rates, macroeconomic conditions, and the Group as
a whole. The primary assumptions in the base case are in accordance with the Group’s
Board-approved 2025–27 three-year plan, with these forecasts being in line with those
considered for the goodwill impairment testing.
The Group possesses substantial financial resources and has significant liquidity in all
scenarios considered. As of 31 December 2024, the Group’s financial liquidity amounted
to £268 million, comprising cash and bank balances of £168 million and an undrawn
£100 million multicurrency senior secured revolving credit facility, with £20 million set
to expire in August 2026 and £80 million set to expire in February 2028. These facilities
ensure that the Group has access to adequate cash resources and working capital.
The severe yet plausible downside scenario reflects a 10% reduction in net revenue
versus the base case, with a mitigation of 6% reduction in total operating costs which
management believe could reasonably be achieved through natural cost reductions from
lower activity, including reduced bonuses, limited recruitment and cost control measures
on certain areas of discretionary spend. In this scenario no breach of covenants was
identified. The Group has also identified additional cost control measures that could be
implemented. These additional cost control measures include reviewing the Group’s work
force and implementing measures to optimise resource allocation, identify and implement
cost-saving measures across the Group and re-evaluate the Group’s product and service
offerings to focus on high-margin high-demand areas. Management is confident that these
forecasts have been prudently established and consider potential effects on growth rates
and trading performance.
The Board is confident that the Group can operate within the confines of their current
debt and revolving credit facility, and covenants (see Note 20), while maintaining sufficient
liquidity to fulfil its financial obligations as they become due for at least 12 months from the
date of signing these financial statements. Consequently, the Group will continue to employ
the going concern basis in the preparation of their financial statements.
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2.
Basis of preparation continued
D.
Critical accounting judgements and estimates
In preparing these consolidated financial statements, S4Capital Group makes certain
judgements and estimates. Judgements and estimates are continually evaluated based on
historical experience and other factors, including the expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual experience may
differ from these judgements and estimates.
The judgements and estimates that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities or the consolidated statement of profit or
loss within the next financial year are discussed below.
Judgements
Revenue recognition
The Group’s revenue is earned from the provision of data and digital media solutions and
technology services. Under IFRS 15, revenue from contracts with customers is recognised
as, or when, the performance obligation is satisfied.
Specifically for the Content segment, due to the size and complexity of contracts,
management is required to form a number of judgements in the determination of the
amount of revenue to be recognised including the identification of performance obligations
within the contract and whether the performance obligation is satisfied over time or at a
point in time. The Group’s revenue is earned from the provision of data and digital media
solutions and technology services. Under IFRS 15, revenue from contracts with customers
is recognised as, or when, the performance obligation is satisfied.
Specifically for the Content segment, due to the size and complexity of contracts,
management is required to form a number of judgements in the determination of
the amount of revenue to be recognised including the identification of performance
obligations within the contract and whether the performance obligation is satisfied over
time or at a point in time. The key judgement is whether revenue should be recognised
over time or at point in time. A substantial portion of our revenue is recognised over
time, as the services are performed, because the customer receives and consumes the
benefit of our performance throughout the contract period, or we create an asset with no
alternative use and are contractually entitled to payment for our performance to date in
the event the client terminates the contract for convenience.
Where revenue is recognised over time, an estimate must be made regarding the progress
towards completion of the performance obligation.
See Note 3 for a full description of the Group’s revenue accounting policies.
Impairment of goodwill and intangible assets
The Group applies judgement in determining whether the carrying value of goodwill and
intangible assets have any indication of impairment on an annual basis, or more frequently
if required. Both external and internal factors are monitored for indicators of impairment.
When performing the impairment review, management’s approach for determining the
recoverable amount of a cash-generating unit is based on the higher of value in use or fair
value less cost to dispose. The value in use is compared with the carrying amount of the
cash generating units.
Tax positions
The Group is subject to sales tax in a number of jurisdictions. Judgement is required in
determining whether the sales tax is chargeable to the customers or not. Provisions in
relation to uncertain tax positions are established on an individual rather than portfolio
basis, considering whether, in each circumstance, the Group considers it is probable that
the uncertainty will crystallise.
Use of alternative performance measures
In establishing which items are disclosed separately as adjusting items to enable a better
understanding of the underlying financial performance of the Group, management exercise
judgement in assessing the size and nature of specific items. The Group uses alternative
performance measures as we believe these measures provide additional useful information
on the underlying trend, performance, and position of the Group. These underlying measures
are used by the Group for internal performance analyses, and credit facility covenants
calculations. The alternative performance measures include ‘adjusted operating profit’,
‘adjusting items’, ‘EBITDA’ (earnings before interest, tax, depreciation) and ‘operational
EBITDA’. The terms ‘adjusted operating profit’, ‘adjusting items’, ‘EBITDA’ and ‘operational
EBITDA’ are not defined terms under IFRS and may therefore not be comparable with similarly
titled profit measures reported by other companies. The measures are not intended to be a
substitute for, or superior to, GAAP measures. A full list of alternative performance measures
and non-IFRS measures together with reconciliations to IFRS measures are set out in the
Alternative Performance Measures on pages 164 to 168.
Estimates
Impairment of goodwill and intangible assets
The recoverable amount for each CGU is determined using a value-in-use calculation.
In determining the value-in-use, the Group uses forecast net revenue and EBITDA percentage
margins adjusted for non-cash transactions to generate cash flow projections. The forecasts
are prepared by management based on the Board-approved three-year business plans for
each CGU along with a one-year management-prepared extrapolation period.
Notes to the consolidated financial statements continued
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2.
Basis of preparation continued
D.
Critical Accounting judgements and estimates continued
The forecasts reflect the expected financial performance for each CGU, and consider the
impact of inflation and the latest macroeconomic trends and external factors, as well as
historic performance and trends, amongst other factors. Further detail can be found in
Note 10.
E.
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of
fair values, for both financial and non-financial assets and liabilities. When measuring the
fair value of an asset or a liability, the Group uses market observable data as far as possible.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs
used in the valuation techniques as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs) as applicable for contingent consideration.
F.
New and amended standards and interpretations adopted by the Group
In the current year, the Group has applied a number of amendments to IFRS Accounting
Standards that are mandatorily effective for an accounting period that begins on or after
1 January 2024. Their adoption has not had any material impact on the disclosures or on
the amounts reported in these financial statements.
Classification of Liabilities as Current or Non-current and Non-current Liabilities with
Covenants – Amendments to IAS 1
In January 2020 and October 2022, the Board issued amendments to IAS 1 Presentation
to Financial Statements to specify the requirements for classifying liabilities as current
or non-current. The Board decided that if an entity’s right to defer settlement of a loan
arrangement is subject to the entity complying with the required covenants only at a date
subsequent to the reporting period (‘future covenants’), the entity has a right to defer
settlement of the liability even if it does not comply with those covenants at the end of the
reporting period.
The amendment further clarifies that the classification of a liability is unaffected by the
likelihood that the entity will exercise its right to defer settlement for at least twelve months
after the reporting period.
Disclosure is required when a liability arising from a loan covenant is classified as non-
current and the entity’s right to defer settlement is contingent on compliance with the future
covenants within twelve months.
The adoption of this amendment on 1 January 2024 had no material impact on the Group’s
consolidated financial statements.
Lease Liability in a Sale and Leaseback – Amendments to IFRS 16
In September 2022, the Board issued Lease Liability in a Sale and Leaseback (Amendments
to IFRS 16). The amendment to IFRS 16 Leases specifies the requirements that a seller-lessee
uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the
seller-lessee does not recognise any amount of the gain or loss that relates to the right of use
it retains.
The adoption of this amendment on 1 January 2024 had no material impact on the Group’s
consolidated financial statements.
Disclosures: Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7
In May 2023, the Board issued amendments to IAS 7 Statement of Cash Flows and IFRS
7 Financial Instruments: Disclosures. The amendments specify disclosure requirements
to enhance the current requirements, which are intended to assist users of financial
statements in understanding the effects of supplier finance arrangements on an entity’s
liabilities, cash flows and exposure to liquidity risk.
The adoption of this amendment on 1 January 2024 had no material impact on the Group’s
consolidated financial statements.
G.
New and amended standards and interpretations not yet adopted
Certain new and amended accounting standards and interpretations have been published
that are not mandatory for 31 December 2024 reporting periods and have not been early
adopted by the Group. The impact of the following standard is under assessment:
• IFRS 18 ‘Presentation and Disclosure in Financial Statements’, which will become
effective in the consolidated Group financial statements for the financial year ending
31 December 2027, subject to endorsement from UK Endorsement Board.
For all other standards there is not expected to be any material impact on the Group in the
current or future reporting periods and on foreseeable future transactions.
H.
Restatement and reclassification
Deferred tax related to business combinations
The Group has restated the comparative financial statements to account for the
recognition of deferred tax balances related to certain business combinations in prior
years. This adjustment represents deferred tax assets recognised in respect of future tax
deductions expected to be allowed for tax goodwill amortisation related to the payments of
employment linked contingent consideration and acquisition expenses recognised in the
post acquisition period on certain business combinations.
Notes to the consolidated financial statements continued
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2.
Basis of preparation continued
H.
Restatement and reclassification continued
We have also recognised deferred tax liabilities in respect of amortisation of goodwill for
tax purposes expected to be allowed in certain jurisdictions. These restatements result
in the recognition on a net basis of deferred tax assets in each of the restated years as
noted below.
The impact of the above adjustment on total equity as at 1 January 2023 is an increase
of £35.1 million.
The following table details the impact on the consolidated statement of profit or loss for
the year ended 31 December 2023:
31 December 2023
As reported
£m
Deferred tax
adjustment
£m
As restated
£m
Income tax credit/(expense)
7.9
(8.3)
(0.4)
Loss for the year
(6.0)
(8.3)
(14.3)
Attributable to the owners of the Company
(6.0)
(8.3)
(14.3)
Basic loss per share (pence)
(0.9)
(1.3)
(2.2)
Diluted loss per share (pence)
(0.9)
(1.3)
(2.2)
The following table details the impact on the consolidated balance sheet as at
31 December 2023:
31 December 2023
As reported
£m
Deferred tax
adjustment
£m
As restated
£m
Non-current assets
Deferred tax assets
7.3
17.4
24.7
Non-current liabilities
Deferred tax liabilities
(32.7)
8.6
(24.1)
Equity
Foreign exchange reserves
(5.3)
(0.8)
(6.1)
Retained earnings
482.1
26.8
508.9
The following table details the impact on the consolidated balance sheet as at
31 December 2022:
31 December 2022
As reported
£m
Deferred tax
adjustment
£m
Deferred tax
offset
£m
As restated
£m
Non-current assets
Deferred tax assets
5.4
39.1
(29.6)
14.9
Non-current liabilities
Deferred tax liabilities
(54.1)
(4.0)
29.6
(28.5)
Equity
Retained earnings
478.4
35.1
–
513.5
3.
Accounting policies
A.
Basis of consolidation
Business combinations
The Group accounts for business combinations using the acquisition method when control
is transferred to the S4Capital Group. The consideration transferred for the acquisition of a
subsidiary comprises the:
• fair values of the assets transferred;
• liabilities incurred to the former owners of the acquired business;
• equity interests issued by the Group;
• fair value of any asset or liability resulting from a contingent consideration
arrangement; and
• fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the
acquisition date. The Group recognises any non-controlling interest in the acquired entity
on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s
proportionate share of the acquired entity’s net identifiable assets.
Notes to the consolidated financial statements continued
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3.
Accounting policies continued
A.
Basis of consolidation continued
Acquisition-related costs are expensed as incurred.
The excess of the:
• consideration transferred;
• amount of any non-controlling interest in the acquired entity; and
• acquisition-date fair value of any previous equity interest in the acquired entity.
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those
amounts are less than the fair value of the net identifiable assets of the business acquired,
the difference is recognised directly in the consolidated statement of profit or loss as a
bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the
future are discounted to their present value as at the date of exchange. The discount rate
used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing
could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability.
Amounts classified as a financial liability are subsequently remeasured to fair value, with
changes in fair value recognised as a fair value gain or loss within acquisition, restructuring
and other expenses within the consolidated statement of profit or loss.
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has
control. The Group controls an entity where the Group is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the transferred asset. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Non-controlling interests in subsidiaries are identified separately from the Group’s
equity therein. Those interests of non-controlling shareholders that entitle their holders
to a proportionate share of net assets upon liquidation may initially be measured at fair
value or at the non-controlling interests’ proportionate share of the fair value of the
acquiree’s identifiable net assets. The choice of measurement is made on an acquisition-
by-acquisition basis. Non-controlling interests are initially measured at fair value.
Subsequent to acquisition, the carrying value of non-controlling interests is the value of
those interests at initial recognition plus the non-controlling interests’ share of subsequent
changes in equity.
Non-controlling interests in the results and equity of subsidiaries are shown separately
in the consolidated statement of profit or loss, statement of comprehensive income,
statement of changes in equity and balance sheet respectively.
B.
Investments in joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control of
the arrangement have rights to the net assets of the joint arrangement. Joint control
is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require unanimous consent of the parties
sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in
these financial statements using the equity method of accounting.
Under the equity method, an investment is recognised initially in the consolidated balance
sheet at cost and adjusted thereafter to recognise the Group’s share of the profit or loss
and other comprehensive income of the associate or joint venture. When the Group’s
share of losses of a joint venture exceeds the Group’s interest in that joint venture (which
includes any long-term interests that, in substance, form part of the Group’s net investment
in the joint venture), the Group discontinues recognising its share of further losses.
Additional losses are recognised only to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of the joint venture.
C.
Revenue recognition
S4Capital Group produces digital campaigns, films, creative content, platforms and
ecommerce for home-grown and international brands and provides data and digital media
solutions for future thinking marketers and agencies and provides technology services.
Revenue comprises of gross amounts billed, or billable to clients less pass-through
expenses, if any and is stated exclusive of VAT and equivalent applicable taxes.
The difference between revenue and net revenue represents direct costs.
When a third-party is involved in the delivery of our services to the client, we assess whether
or not we are acting as a principal or an agent in the arrangement. The assessment is based
on whether we control the specified services at any time before they are transferred to
the customer. We act as principal when we control the specified services before they are
transferred to the client and we are responsible for providing the specified services, or we are
responsible for directing and integrating third-party vendors to fulfill
Notes to the consolidated financial statements continued
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C.
Revenue recognition continued
our performance obligation at the agreed upon contractual price. We act as an agent and
arrange, at the client’s direction, for third parties to perform certain services. In these cases,
we do not control the services prior to the transfer to the client.
For performance obligations in which we act as principal, we record the gross amount billed
to the customer within total revenue and the related incremental costs incurred as direct
costs. Direct costs comprise fees and expenses paid to external suppliers when they are
engaged to perform all or part of a specific project and are charged directly to the customer,
and where the Group retains quality control oversight.
For performance obligations for which we act as the agent, we record our revenue as the
net amount of our gross billings less any pass-through expenses amounts remitted to
third parties.
Costs to obtain a contract are typically expensed as incurred as contracts are generally
short term in nature.
S4Capital Group determines all the separate performance obligations within the customers’
contract at contract inception. In many instances, promised services in a contract are not
considered distinct or represent a series of services that are substantially the same with
the same pattern of transfer to the customer and, as such, are accounted for as a single
performance obligation.
Revenue is recognised when a performance obligation is satisfied, in accordance with
the terms of the contractual arrangement. This is assessed on a contract-by-contract
basis. Revenue is recognised over time when the customer consumes the services as
it is performed or the Group is entitled to payment for the services performed to date.
Where there is no clear consumption by the customer or limited activities that transfer
to the customer, revenue is recognised at a point in time, generally when the services
or created content are delivered to the customer.
For each performance obligation that is satisfied over time, revenue is recognised by
measuring progress towards completion of that performance obligation. Revenue recognised
over time is based on the proportion of the level of services performed. Either an input method
or an output method, depending on the particular arrangement, is used to measure progress
for each performance obligation. For most fee arrangements, costs incurred are used as
an objective input measure of performance. The primary input of substantially all work
performed under these arrangements is labour and direct costs. There is normally a direct
relationship between costs incurred and the proportion of the contract performed to date.
In other circumstances relevant output measures, such as the achievement of any project
milestones stipulated in the contract, are used to assess proportional performance.
Revenue recognised in the current reporting period that related to performance obligations
that were satisfied, or partially satisfied, in a prior reporting period was immaterial.
For our retainer arrangements, we have a stand-ready obligation to perform services on an
ongoing basis over the life of the contract. The scope of these arrangements is broad and
generally not reconcilable to another input or output criteria. In these instances, revenue is
recognised using a time-based method resulting in straight-line revenue recognition.
Where the total project costs exceed the project revenue, the loss is recognised within
direct costs and personnel costs in the consolidated statement of profit or loss. A provision
is recognised for such loss. No material onerous contract provisions have been identified in
the year.
Accrued income is a contract asset and is recognised when a performance obligation
has been satisfied but has not yet been billed. Accrued income is transferred to
receivables when the right to consideration is unconditional and billed per the terms
of the contractual agreement.
In certain cases, payments are received from customers or amounts are billed with an
unconditional right to receive consideration prior to satisfaction of performance obligations
and recognised as deferred income. These balances are considered contract liabilities and
are included in deferred income.
Accrued income and deferred income arising on contracts are included in trade and other
receivables and trade and other payables, as appropriate.
Trade receivables are recognised initially at the amount of consideration that is
unconditional, unless they contain significant financing components in which case they
are recognised at fair value. They are subsequently measured at amortised cost using the
effective interest method, less loss allowance. No element of financing is deemed present
as the sales are made with a general credit term of 30 days; some large multinational
customers have credit terms of 45 days to 120 days.
The Group has applied the practical expedients in IFRS 15 not to account for significant
financing components where the timing difference between receiving consideration and
transferring control of services or created content to its customer is one year or less; and to
expense the incremental costs of obtaining a contract when the amortisation period of the
asset otherwise recognised would have been one year or less.
The Group has applied the practical expedient permitted by IFRS 15 to not disclose the
transaction price allocated to performance obligations unsatisfied (or partially unsatisfied)
as of the end of the reporting period as contracts typically have an original expected
duration of a year or less.
Notes to the consolidated financial statements continued
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D.
Foreign currency
The main foreign currencies for the Group are the US dollar (USD) and Euro (EUR).
Foreign currency transactions and balances
• Foreign currency transactions are translated into the functional currency using the
average exchange rates in the month. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation at the reporting period end
exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the consolidated statement of profit or loss.
• Share capital, share premium and brought forward earnings are translated using the
exchange rates prevailing at the dates of the transactions.
Consolidation of foreign entities
On consolidation, income and expenses of the foreign entities are translated from the
local functional currencies to Pound Sterling, the presentation currency of the S4Capital
Group, using average exchange rates during the period, apart from any foreign entities in
hyperinflationary economies (see note 3F). All assets and liabilities of the Group’s foreign
operations are translated from the local functional currencies to Pound Sterling using the
exchange rates prevailing at the reporting date. The exchange differences arising from the
translation of the net investment in foreign entities are recognised in other comprehensive
income and accumulated in a separate component of equity. Exchange differences are
recycled to the consolidated statement of profit or loss as a reclassification adjustment
upon disposal of the foreign operation.
E.
Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability
is recognised for the amount expected to be paid if S4Capital Group has a present legal
or constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
Share-based payments
S4Capital Group issues equity-settled share-based payments (including share options) to
certain employees and accounts for these awards in accordance with IFRS 2. The share-
based payments are measured at fair value at the grant date.
The fair value determined at the grant date is recognised in the consolidated statement
of profit or loss as an expense on a straight-line basis over the relevant vesting period,
based on the Group’s estimate of the number of shares that will ultimately vest and adjusted
for the effect of non-market vesting conditions. A detailed description of the share-based
payment plans is included in Note 23.
Defined contribution plans
S4Capital Group accounts for retirement benefit costs in accordance with IAS 19 Employee
Benefits. For defined contribution plans, contributions are charged to the consolidated
statement of profit or loss as payable in respect of the accounting period.
F.
Hyperinflation
Argentina is designated as a hyperinflationary economy and the financial statements of the
Group’s subsidiaries in Argentina have been adjusted for the effects of inflation.
IAS 29 Financial Reporting in Hyperinflationary Economies requires that the consolidated
statement of profit or loss is adjusted for inflation in the period and translated at the year-
end foreign exchange rate and that non-monetary assets and liabilities on the balance
sheet are restated to reflect the change in purchasing power caused by inflation from the
date of initial recognition.
In 2024, this resulted in an increase in property, plant and equipment of £1.8 million
(2023: £3.5 million), an increase in right-of-use assets of £1.8 million (2023: £2.9 million),
an increase in equity of £nil (2023: £nil) and an opening equity restatement of £4.5 million
(2023: £2.6 million). For the year ended 31 December 2024, this resulted in a loss on the net
monetary position of £1.7 million (2023: gain on the net monetary position of £1.3 million)
in the consolidated statement of profit or loss. The impact on other non-monetary assets
and liabilities in the year was immaterial. The FACPCE price index (Federación Argentina
de Consejos Profesionales de Ciencias Económicas) of 7,694.0 was used at 31 December
2024 (2023: 3,533.2). The movement in this index during 2024 was 218% (2023: 192%).
In addition to the hyperinflationary economy causing the general devaluation of the
Argentinian peso, on 13 December 2023, the Argentinian peso experienced a significant
devaluation of over 50%. This was a one-off single event towards the end of the Group’s
reporting period. The Group considers the impact of hyperinflation as part of its underlying
operations, however, the significant devaluation is considered as a one-off item and
therefore the impact is excluded from the Group’s Alternative Performance Measures.
The impact on operational EBITDA in 2023 was a reduction of £9.3 million.
Notes to the consolidated financial statements continued
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G.
Income tax
Income tax expense comprises current and deferred tax. It is recognised in consolidated
statement of profit or loss except to the extent that it relates to a business combination, or
items recognised directly in equity or in other comprehensive income.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss
for the financial year and any adjustment to tax payable or receivable in respect of previous
years. It is measured using tax rates enacted or substantively enacted at the reporting date.
Current tax assets and liabilities are offset only if certain criteria are met.
Management periodically evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation and considers whether it
is probable that a taxation authority will accept an uncertain tax treatment. The Group
measures its tax balances either based on the most likely amount or the expected
value, depending on which method provides a better prediction of the resolution of
the uncertainty.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between
the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except when
the deferred tax liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss and does not give rise to
equal taxable and deductible temporary differences.
In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint arrangements, when the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences
will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences, the carry forward
of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the
extent that it is probable that taxable profit will be available against which these items can
be utilised.
In respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint arrangements, deferred tax assets are recognised only to
the extent that it is probable that the temporary differences will reverse in the foreseeable
future and taxable profit will be available against which the temporary differences can
be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets
are re-assessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.
In assessing the recoverability of deferred tax assets, the Group relies on the same forecast
assumptions used elsewhere in the financial statements and in other management reports.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the reporting date.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for
separate recognition at that date, are recognised subsequently if new information about
facts and circumstances change. The adjustment is either treated as a reduction in goodwill
(as long as it does not exceed goodwill) if it was incurred during the measurement period or
recognised in profit or loss.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally
enforceable right to set off current tax assets and current tax liabilities and the deferred
tax assets and deferred tax liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either
to settle current tax liabilities and assets on a net basis, or to realise the assets and settle
the liabilities simultaneously, in each future period in which significant amounts of deferred
tax liabilities or assets are expected to be settled or recovered.
H.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost
of intangible assets acquired in a business combination is their fair value at the date of
acquisition. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and accumulated impairment losses. Internally generated
intangibles, excluding capitalised development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
Notes to the consolidated financial statements continued
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H.
Intangible assets continued
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed
for impairment whenever there is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an intangible asset with a
finite useful life are reviewed at least at the end of each reporting period. Changes in the
expected useful life or the expected pattern of consumption of future economic benefits
embodied in the asset are considered to modify the amortisation period or method,
as appropriate, and are treated as changes in accounting estimates. The amortisation
expense on intangible assets with finite lives is recognised in the consolidated statement
of profit or loss.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment
annually, either individually or at the cash-generating unit level. The assessment of indefinite
life is reviewed annually to determine whether the indefinite life continues to be supportable.
If not, the change in useful life from indefinite to finite is made on a prospective basis.
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains
control) or when no future economic benefits are expected from its use or disposal.
Any gain or loss arising upon derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the
consolidated statement of profit or loss.
Goodwill
The Group accounts for business combinations using the acquisition method when control
is transferred to the S4Capital Group. The consideration transferred is measured at the fair
value of the assets given, equity instruments issued, and liabilities incurred or assumed at
the date of exchange. Costs directly attributable to the acquisition are expensed in the year.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date.
Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the
fair value of net identifiable assets and liabilities acquired. Goodwill is measured at cost less
accumulated impairment losses. Where the fair value of identifiable assets, liabilities and
contingent liabilities exceed the fair value of consideration paid, the excess is credited in full
to the consolidated statement of profit or loss on the acquisition date.
Other intangible assets – arising on the acquisition of business combinations
Brands, customer relationships and order backlog arising on the acquisition of business
combinations, are measured at cost less accumulated amortisation and accumulated
impairment losses. The acquired brands are well-known brands which are registered,
have a good track record and have finite useful lives. Customer relationships are measured
at the time of the business combination and have finite useful lives. Order backlog has finite
useful lives and represents the contracted but not yet fulfilled revenues at the time of the
business combination.
Other intangible assets – development expenditure and purchased software
Expenditure on research activities is recognised in the consolidated statement of profit
or loss as incurred. Development expenditure is capitalised only if the expenditure can
be measured reliably, the product or process is technically and commercially feasible,
future economic benefits are probable and the Group intends to and has sufficient
resources to complete development and to use or sell the asset. Otherwise, it is recognised
in the consolidated statement of profit or loss as incurred. Subsequent to initial recognition,
development expenditure is measured at cost less accumulated amortisation and
accumulated impairment losses.
Purchased software packages have finite useful lives and are measured at cost less
accumulated amortisation and accumulated impairment losses.
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic
benefits embodied in the specific asset to which it relates. All other expenditure,
including expenditure on internally generated goodwill and brands, is recognised
in profit or loss as incurred.
Impairment of goodwill and intangible assets with indefinite useful lives
The Group assesses, at each reporting date, whether there is an indication that an asset
may be impaired. If any indication exists, or when annual impairment testing for an asset
is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in
use. The recoverable amount is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groups
of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount,
the asset is considered impaired and is written down to its recoverable amount.
Notes to the consolidated financial statements continued
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H.
Intangible assets continued
In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining fair value less costs of
disposal, recent market transactions are taken into account. If no such transactions can be
identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly traded companies or other available fair
value indicators.
The Group bases its impairment calculation on the most recent budgets and forecast
calculations, which are prepared separately for each of the Group’s CGUs to which the
individual assets are allocated. These budgets and forecast calculations generally cover
a period of four years. A long-term growth rate is calculated and applied to project future
cash flows after the fourth year.
Impairment losses of continuing operations are recognised in the consolidated statement
of profit or loss in expense categories consistent with the function of the impaired asset,
except for assets previously revalued with the revaluation taken to other comprehensive
income (OCI). For such assets, the impairment is recognised in OCI up to the amount of
any previous revaluation.
For assets excluding goodwill, an assessment is made at each reporting date to determine
whether there is an indication that previously recognised impairment losses no longer exist
or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s
recoverable amount. A previously recognised impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset’s recoverable amount since
the last impairment loss was recognised. The reversal is limited so that the carrying amount
of the asset does not exceed its recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss been recognised
for the asset in prior years. Such reversal is recognised in the consolidated statement of
profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is
treated as a revaluation increase.
Goodwill is tested for impairment annually at year end and when circumstances indicate
that the carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each CGU
to which the goodwill relates. When the recoverable amount of the CGU is less than its
carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill
cannot be reversed in future periods.
Intangible assets with indefinite useful lives are also tested for impairment annually at year
end at the CGU level, as appropriate, and when circumstances indicate that the carrying
value may be impaired.
Amortisation
Amortisation is charged to the consolidated statement of profit or loss to allocate the cost
of intangible assets over their estimated useful economic lives, using the straight-line
method. Goodwill is not amortised.
The estimated useful economic lives of intangible assets for current and comparative
periods are as follows:
• Brands
3 – 20 years
• Customer relationships
6 – 16.5 years
• Order backlog
0 – 3 years
• Others
3 – 10 years
Amortisation methods and useful lives are reviewed at each reporting date and adjusted
if appropriate.
I.
Leases
At inception of a lease contract, the Group assesses whether the contract conveys the
right to control the use of an identified asset for a certain period of time and whether it
obtains substantially all the economic benefits from the use of that asset, in exchange
for consideration.
Each lease is recognised as a right-of-use asset with a corresponding liability at the date
at which the lease asset is available for use by the Group. The right-of-use asset is initially
measured based on the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred, less any
lease incentives received.
The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease
term on a straight-line basis. Depreciation is recognised in operating expenses costs and
interest expense is recognised under finance expenses in the consolidated statement of
profit or loss. The lease term includes periods covered by an option to extend if the Group
is reasonably certain to exercise that option. Right-of-use assets are reviewed for indicators
of impairment and an impairment test is performed when an impairment indicator exists.
Notes to the consolidated financial statements continued
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I.
Leases continued
The lease liability is initially measured at the present value of the lease payments that
are not paid at the commencement date, discounted using the interest rate implicit in the
lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate
for the same term as the underlying lease. Lease payments included in the measurement
of lease liabilities comprise fixed payments less any lease incentives receivable and
variable lease payments that depend on an index or a rate as at the commencement date.
Lease modifications result in remeasurement of the lease liability.
Short-term leases and leases of low value assets
The Group has elected to use the practical expedient not to recognise right-of-use assets
and lease liabilities for short-term leases that have a lease term of 12 months or less from
the commencement date and do not contain a purchase option and leases of low value
assets which the present value of the assets is below £5,000. The payments associated
with these leases are recognised as operating expenses over the lease term.
J.
Property, plant and equipment
Recognition and measurement
Property, plant and equipment are measured at cost less accumulated depreciation and
any accumulated impairment losses. Historical cost includes expenditure that is directly
attributable to bringing the asset to the location and condition necessary for it to be
capable of operating in the manner intended by management. Any gain or loss on disposal
of an item of property, plant and equipment is recognised in the consolidated statement of
profit or loss.
Depreciation
Depreciation is charged to the consolidated statement of profit or loss to allocate the cost
of items of property, plant and equipment less their estimated residual values over their
estimated useful lives, using the straight-line method. The estimated useful lives for current
and comparative periods range as follows:
• Leasehold improvements
Over life of lease
• Furniture and fixtures
5 years
• Office equipment
3 – 5 years
• Other assets
3 – 5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date
and adjusted if appropriate.
Impairment
PPE assets are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. Any impairment in carrying
value is being charged to the consolidated statement of profit or loss. PPE assets that have
been impaired are reviewed for possible reversal of the impairment loss at the end of each
reporting period. The reversal is limited to the carrying amount net of depreciation, had no
impairment loss been recognised in the prior reporting periods.
K.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.
Financial assets – Recognition and initial measurement
On initial recognition, a financial asset is classified as measured at: amortised cost;
fair value through other comprehensive income (FVOCI) – debt investment; FVOCI –
equity investment; or fair value through profit or loss (FVTPL).
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing
them. With the exception of trade receivables that do not contain a significant financing
component or for which the Group has applied the practical expedient, the Group initially
measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs. Trade receivables that do not contain a
significant financing component or for which the Group has applied the practical expedient
are measured at the transaction price.
In order for a financial asset to be classified and measured at amortised cost or fair value
through OCI, it needs to give rise to cash flows that are solely payments of principal and
interest (SPPI) on the principal amount outstanding. This assessment is referred to as the
SPPI test and is performed at an instrument level. Financial assets with cash flows that are
not SPPI are classified and measured at fair value through profit or loss, irrespective of the
business model.
The Group’s business model for managing financial assets refers to how it manages its
financial assets in order to generate cash flows. The business model determines whether
cash flows will result from collecting contractual cash flows, selling the financial assets,
or both. Financial assets classified and measured at amortised cost are held within a
business model with the objective to hold financial assets in order to collect contractual
cash flows while financial assets classified and measured at fair value through OCI are held
within a business model with the objective of both holding to collect contractual cash flows
and selling.
Notes to the consolidated financial statements continued
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K.
Financial instruments continued
Classification and subsequent measurement – Financial assets
Financial assets are not reclassified subsequent to their initial recognition unless the
Group changes its business model for managing financial assets, in which case all affected
financial assets are reclassified on the first day of the first reporting period following the
change in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions
and is not designated as at FVTPL:
• it is held within a business model whose objective is to hold assets to collect contractual
cash flows; and
• its contractual terms give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is
not designated as at FVTPL:
• it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
• its contractual terms give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may
irrevocably elect to present subsequent changes in the investment’s fair value in OCI.
This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described
above are measured at FVTPL.
On initial recognition, the Group may irrevocably designate a financial asset that otherwise
meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing
so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets – Derecognition
The Group derecognises a financial asset when:
• the contractual rights to the cash flows from the financial asset expire; or
• it transfers the rights to receive the contractual cash flows in a transaction in which either:
• substantially all of the risks and rewards of ownership of the financial asset are
transferred; or
• the Group neither transfers nor retains substantially all of the risks and rewards of
ownership and it does not retain control of the financial asset.
The Group enters into transactions whereby it transfers assets recognised in its
consolidated balance sheet but retains either all or substantially all of the risks and rewards
of the transferred assets. In these cases, the transferred assets are not derecognised.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt
instruments not held at fair value through profit or loss. ECLs are based on the difference
between the contractual cash flows due in accordance with the contract and all the cash
flows that the Group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of
collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a
significant increase in credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next 12 months (a 12 month
ECL). For those credit exposures for which there has been a significant increase in credit
risk since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in
calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has
established a provision matrix that is based on its historical credit loss experience, adjusted
for forward-looking factors specific to the debtors and the economic environment.
In certain cases, the Group may also consider a financial asset to be in default when internal
or external information indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements held by
the Group. A financial asset is written off when there is no reasonable expectation of
recovering the contractual cash flows.
Financial liabilities – Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings or payables as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings
including bank overdrafts.
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
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3.
Accounting policies continued
K.
Financial instruments continued
Financial liabilities – Subsequent measurement
For the purposes of subsequent measurement, financial liabilities are classified in
two categories:
• Financial liabilities at fair value through profit or loss; and
• Financial liabilities at amortised cost.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss.
Any gains or losses on liabilities held are recognised as a fair value gain or loss in the
consolidated statement of profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied.
Financial liabilities at amortised cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured
at amortised cost using the effective interest rate (EIR) method. Gains and losses are
recognised in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortisation is included as
finance costs in the consolidated statement of profit or loss.
Financial liabilities – Derecognition
The Group derecognises a financial liability when its contractual obligations are discharged
or cancelled, or expire. The Group also derecognises a financial liability when its terms are
modified and the cash flows of the modified liability are substantially different, in which
case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount
extinguished and the consideration paid (including any non-cash assets transferred or
liabilities assumed) is recognised in the consolidated statement of profit or loss as a fair
value gain or loss.
L.
Equity
The Group’s ordinary share capital is classified as equity instruments. Incremental costs
directly attributable to the issue of new shares are shown in equity as a deduction, net of
tax, from the proceeds. The Group issues financial instruments which are treated as equity
only to the extent that they do not meet the definition of a financial liability. These equity
instruments are based on a fixed number of shares. These equity instruments include
both initial deferred equity consideration and deferred equity consideration following the
achievement of contingent consideration criteria.
M.
Cash flow statement
The cash flow statement is prepared using the indirect method. The cash and cash
equivalents in the cash flow statement comprise cash and cash equivalents except for
deposits with a maturity of longer than three months and minus current bank loans drawn
under overdraft facilities. Cash flows denominated in foreign currencies are converted
based on average exchange rates. Exchange rate differences affecting cash items are
shown separately in the cash flow statement.
Income taxes paid are included in cash flows from operating activities. Interest and facility
fees paid is included in cash flows from financing activities. Purchase consideration for
amounts paid for acquiring subsidiaries, net of cash acquired, is included in cash flows
from investing activities, insofar as the acquisition is settled in cash. Performance linked
contingent consideration paid is included within the investing activities. Where the
estimate of contingent consideration is adjusted outside of the measurement period,
through the consolidated statement of profit or loss, then the payment of the difference
between the initial estimate and the increased estimate is included within operating cash
flows. Employment linked contingent consideration paid is included in cash flows from
operating activities. Principal elements of lease payments are included in cash flows from
financing activities.
4.
Acquisitions
Current year acquisitions
No acquisitions were made during the year ended 31 December 2024.
Prior year acquisitions
XX Artists
During the year, the Group settled the remaining holdback of £1.3 million from escrow as
the business had achieved the post acquisition EBITDA targets for the 12 month period
ended 31 December 2022.
Notes to the consolidated financial statements continued
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Notes to the consolidated financial statements continued
4.
Acquisitions continued
TheoremOne
Included within other reserves as at 31 December 2024 is £26.4 million, comprised of
£26.4 million recognised as deferred equity consideration in 2023.
At 31 December 2024, £6.1 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.
4 Mile
As a result of partially achieving post acquisition EBITDA targets for the 12 month period
ended 31 December 2022, £6.7 million and £2.5 million were paid in cash to the Sellers
during the year in relation to performance linked and employment linked contingent
consideration respectively.
During the year, £2.2 million of holdbacks were paid from escrow, with a £2.3 million
gain recognised in the consolidated statement of profit or loss through contingent
considerations as remuneration. The remaining balance of holdbacks as at 31 December
2024 was therefore £nil.
Zemoga Group (Zemoga)
During the year, £0.4 million of holdbacks were paid from escrow. The remaining balance
of holdbacks as at 31 December 2024 was therefore £nil.
5.
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 year, S4Capital Group has three reportable segments as follows:
• Content: 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 touchpoint.
• Data&Digital Media: Full-service campaign management analytics, creative production
and ad serving, platform and systems integration, 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, fast moving consumer goods
(FMCG) 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 S4Capital Group uses net revenue rather than revenue to manage the Group
due to the fluctuating amounts of direct costs, which form part of revenue. The following is
an analysis of the Group’s net revenue and results by reportable segments:
2024
Content
£m
Data&Digital
Media
£m
Technology
Services
£m
Total
£m
Revenue
566.7
195.0
86.5
848.2
Net revenue
475.5
192.4
86.7
754.6
Segment profit1, 2
48.7
46.0
11.5
106.2
Overhead costs
(18.4)
Adjusted non-recurring and acquisition
related expenses3
(35.6)
Depreciation, amortisation and impairment4,5
(355.0)
Net finance costs and loss on net
monetary position
(28.1)
Loss before income tax
(330.9)
Notes:
1. Including £13.2 million related to depreciation and £5.3 million impairment of right-of-use assets.
2. In arriving at segment profit, personnel costs of £368.7 million, £128.7 million and £68.4 million were deducted from
Content, Data&Digital Media and Technology services respectively.
3. Comprised of acquisition and restructuring expenses (£21.7 million), share-based payment costs (£6.5 million),
impairment of right-of-use assets (£5.3 million) and onerous lease provision (£2.1 million). See Note 6.
4. Includes impairment of goodwill of £204.4 million in Content and of goodwill and intangibles of £96.8 million in
Technology Services.
5. Excluding £13.2 million related to depreciation and £5.3 million impairment of right-of-use assets.
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5.
Segment information continued
A.
Operating segments continued
2023
Content
£m
Data&Digital
Media
£m
Technology
Services
£m
Total
£m
Revenue
664.1
210.4
137.0
1,011.5
Net revenue
528.9
207.3
137.0
873.2
Segment profit1, 2
46.5
35.2
43.4
125.1
Overhead costs
(22.1)
Adjusted non-recurring and
acquisition related expenses3
(22.0)
Depreciation, amortisation
and impairment4
(60.8)
Net finance costs and gain
on net monetary position
(34.1)
Loss before income tax
(13.9)
Notes:
1. Including £17.1 million related to depreciation of right-of-use assets.
2. In arriving at segment profit, personnel costs of £419.3 million, £150.6 million and £83.9 million were deducted
from Content, Data&Digital Media and Technology Services respectively.
3. Comprised of acquisition and restructuring expenses (£11.9 million) and share-based payment costs (£10.1 million).
See Note 6.
4. Excluding £17.1 million related to depreciation of right-of-use assets.
Segment profit represents the profit earned by each segment without allocation of the
share of profit 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 customer (2023: one) accounted for more than 10% of the Group’s revenue during the
year, contributing £148.1 million (2023: £177.5 million). The revenue from this customer was
attributable to both the Content and Data&Digital Media segments.
C.
Geographical information
The Group’s revenue, net revenue and non-current assets by geographical segment are
shown below. Non-current assets exclude deferred tax assets.
2024
The Americas
£m
Europe, Middle
East & Africa
£m
Asia Pacific
£m
Total
£m
Revenue
628.7
165.7
53.8
848.2
Net revenue
587.9
123.4
43.3
754.6
Non-current assets
504.6
232.7
30.2
767.5
2023
The Americas
£m
Europe, Middle
East & Africa
£m
Asia Pacific
£m
Total
£m
Revenue
747.5
199.0
65.0
1,011.5
Net revenue
688.1
133.1
52.0
873.2
Non-current assets
741.5
370.7
42.3
1,154.5
6.
Operating expenses
Personnel expenses1
2024
£m
2023
£m
Wages and salaries
465.0
528.9
Social security costs2
77.9
88.0
Other pension costs
12.6
16.3
Share-based payments2
6.8
10.1
Other personnel costs
19.2
27.5
Total
581.5
670.8
Notes:
1. Contingent consideration is disclosed separately from personnel expenses, as part of acquisition expenses overleaf.
2. Social security costs includes £0.3 million credit (2023: £nil) of social security relating to share-based payments.
Notes to the consolidated financial statements continued
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6.
Operating expenses continued
The key management personnel comprise the Directors of the Group. Details of
compensation for key management personnel are disclosed on pages 91 to 92.
Monthly average number of employees by segment
2024
2023
Content
4,688
5,197
Data&Digital Media
2,076
2,374
Technology Services
678
772
Central
56
31
Total
7,498
8,374
Monthly average number of employees by geography
2024
2023
The Americas
5,328
5,641
Europe, Middle East and Africa
1,382
1,862
Asia Pacific
788
871
Total
7,498
8,374
Acquisition, restructuring and other one-off expenses
2024
£m
2023
£m
Advisory, legal, due diligence and related costs
0.8
2.3
Restructuring costs
18.8
18.2
Transformation costs
4.2
2.9
Acquisition related bonuses
0.2
–
Contingent consideration linked to employee service
0.7
13.2
Contingent consideration fair value gain
(3.0)
(24.7)
Onerous lease expense
2.1
–
Total
23.8
11.9
Depreciation, amortisation and impairment
2024
£m
2023
£m
Depreciation of property, plant and equipment
9.5
12.2
Depreciation of right-of-use of assets
13.2
17.1
Amortisation of intangible assets
44.3
48.6
Impairment of goodwill
280.4
–
Impairment of intangible assets
20.8
–
Impairment of right-of-use of assets
5.3
–
Total
373.5
77.9
Other operating expenses
2024
£m
2023
£m
IT expenses
31.0
30.6
Consultancy fees
6.0
6.7
Accounting and administrative service fees
7.5
9.3
Lease costs
6.5
6.2
Sales and marketing costs
7.4
7.9
Legal fees
3.1
4.3
Travel and accommodation costs
7.9
9.3
Insurance fees
2.7
3.5
Impairment loss recognised on trade receivables
1.4
3.6
Other general and administrative costs
5.2
11.2
Total
78.7
92.6
Lease costs mainly relate to short term and low value lease costs under IFRS 16.
Notes to the consolidated financial statements continued
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6.
Operating expenses continued
Audit fees included in general and administrative costs are as follows:
Audit fees
2024
£m
2023
£m
Fees payable to the Company’s auditors and their associates
for the audit of parent company and consolidated
financial statements
3.8
3.7
Fees payable to company auditors and their associates for
other services:
Audit of the financial statements of the Company’s subsidiaries
0.2
0.3
Total audit fees for the current year audit
4.0
4.0
Fees payable to the Company’s auditors and their associates for
the audit of parent company and consolidated financial
statements – prior year
–
–
Total audit fees
4.0
4.0
Fees payable to Company auditors and their associates for
audit-related assurance services
0.4
0.4
Other assurance services
0.1
–
Total
4.5
4.4
Audit-related assurance services to the Group relates to the fee charged for
the half-year review. No other fees than those disclosed above were payable to
PricewaterhouseCoopers LLP.
7.
Finance income and expenses
Finance income
2024
£m
2023
£m
Interest income
3.0
2.8
Foreign exchange differences
2.3
–
Total
5.3
2.8
Finance expenses
2024
£m
2023
£m
Interest on bank loans and overdrafts
(25.5)
(23.3)
Interest on lease liabilities
(2.5)
(2.3)
Foreign exchange differences
–
(8.0)
Other finance costs
(3.7)
(4.6)
Total
(31.7)
(38.2)
8.
Income tax
The income tax credit/(expense) comprises the following:
2024
£m
2023
Restated1
£m
Current tax for the year
(7.3)
(13.3)
Adjustments for current tax of prior years
2.4
(1.3)
Total current tax
(4.9)
(14.6)
Origination and reversal of timing differences2
31.4
14.2
Adjustments for deferred tax of prior periods
(3.1)
–
Effect of change in tax rates
0.6
–
Income tax credit/(expense) in profit or loss
24.0
(0.4)
Notes:
1. The comparatives as at 31 December 2023 have been restated to account for the recognition of deferred tax
balances related to certain business combinations in the prior years (see Note 2).
2. Includes £20.8 million credit relating to the deferred tax impact of the impairment charge.
The tax charge for the year can be reconciled to the income tax credit/(expense) in the
consolidated statement of profit or loss as follows:
2024
£m
2023
Restated1
£m
Loss before income tax
(330.9)
(13.9)
Tax credit at the UK rate of 25.0% (2023: 23.5%)
82.7
3.3
Tax effect of amounts which are non-deductible
(57.2)
(3.9)
Difference in overseas tax rates
(1.5)
0.2
Income tax credit/(expense) in profit or loss
24.0
(0.4)
Note:
1. The comparatives as at 31 December 2023 have been restated to account for the recognition of deferred tax
balances related to certain business combinations in the prior years (see Note 2).
The UK rate has increased from 23.5% in 2023 to 25% in 2024 due to the increase of
corporation tax rate in the UK from 19% to 25% from April 2023. The applicable tax
rate is based on the proportion of the contribution to the result by the Group entities
and the tax rate applicable in the respective countries. The applicable tax rate in the
respective countries ranges from 0% to 35%. The effective tax rate for the year deviates
from the applicable tax rate mainly because of non-deductible items, amortisation,
accelerated capital allowances over depreciation on plant, property and equipment
and differences in overseas tax rate.
Notes to the consolidated financial statements continued
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8.
Income tax continued
The Group is within the scope of the OECD Pillar Two model rules. Pillar Two legislation
was enacted in the United Kingdom, the jurisdiction in which the Company is incorporated,
in July 2023 and came into effect for accounting periods commencing on or after
31 December 2023. Under the legislation, the Group is liable to pay a top-up tax on
adjusted jurisdictional profits for the difference between its GloBE effective tax rate
per jurisdiction and the 15% minimum rate.
The Group has assessed the current tax impact of the Pillar Two legislation in the
jurisdictions within which the Company operates, and no material current tax expense is
expected to arise under Pillar Two for the current period. The Group applies the exception
to recognising and disclosing information about deferred tax assets and liabilities related
to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023.
The Group continues to monitor legislative developments related to Pillar Two and will
assess any potential impact on its consolidated results of operations, financial position,
and cash flows.
9.
Loss per share
2024
2023
Restated1
Loss attributable to shareowners of the Company (£m)
(306.9)
(14.3)
Weighted average number of Ordinary Shares
671,956,509 639,218,703
Basic loss per share (pence)
(45.7)
(2.2)
Loss per share is calculated by dividing the loss attributable to the shareowners of the
Group by the weighted average number of Ordinary Shares in issue during the year.
2024
2023
Restated1
Loss attributable to shareowners of the Company (£m)
(306.9)
(14.3)
Weighted average number of Ordinary Shares
671,956,509 639,218,703
Diluted loss per share (pence)
(45.7)
(2.2)
2024
2023
Restated1
Adjusted profit attributable to shareowners of the Company (£m)
34.7
28.2
Weighted average number of Ordinary Shares
671,956,509 639,218,703
Adjusted basic earnings per share (pence)
5.2
4.4
Note:
1. The comparatives as at 31 December 2023 have been restated to account for the recognition of deferred tax
balances related to certain business combinations in the prior years (see Note 2).
10. Goodwill
Cost
2024
£m
2023
£m
At 1 January
706.5
734.0
Acquired through business combinations
–
0.2
Foreign exchange differences
(9.2)
(27.7)
At 31 December
697.3
706.5
Accumulated impairment
At 1 January
(15.2)
(15.2)
Impairment charge in year
(280.4)
–
Foreign exchange differences
(10.5)
–
At 31 December
(306.1)
(15.2)
Net Book Value
At 1 January
691.3
718.8
At 31 December
391.2
691.3
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.
Impairment testing
Goodwill acquired through business combinations is allocated to CGUs for the purpose
of impairment testing. The Group’s three CGUs are Content, Data&Digital Media and
Technology Services. The goodwill balance is allocated to each of the three CGUs as follows:
2024
£m
2023
£m
Content
197.1
413.6
Data&Digital Media
194.1
197.6
Technology Services
–
80.1
Total
391.2
691.3
The recoverable amount for each CGU is determined using a value-in-use calculation.
In determining the value-in-use, the Group uses forecast revenue and profits adjusted
for non-cash transactions to generate cash flow projections. The forecasts are prepared
by management based on the Board-approved three-year business plans for each CGU
along with a one-year management-prepared extrapolation period. The forecasts reflect
the expected financial performance for each CGU, and consider the impact of inflation and
the latest macroeconomic trends and external factors, as well as historic performance and
trends, amongst other factors.
Notes to the consolidated financial statements continued
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10. Goodwill continued
The impairment of goodwill and customer relationships totals £301.2 million, with a related
deferred tax credit of £20.8 million, resulting in a net charge of £280.4 million (2023: £nil)
recognised during the year. This impairment reflects trading conditions in the second half
of 2024 and the subsequent medium-term outlook following the completion of our budget
and three-year planning process. These trends translated into ongoing client caution and
lower activity in the Content CGU particularly with some of our larger technology clients
in the second half of the year. Further, our outlook for the Technology Services CGU is
mainly affected by longer sales cycles for new business and a reduction in some of our
larger relationships.
The table below sets out this year’s impairment charge for the Content and Technology
Services CGUs, along with their respective recoverable amounts for the year ended
31 December 2024:
Impairment
of goodwill
£m
Impairment of
customer
relationships
£m
Deferred tax
impact of
impairment
charge
£m
Net
impairment
charge
£m
Recoverable
amount
£m
Content
204.4
–
(7.9)
196.5
511.2
Technology Services
76.0
20.8
(12.9)
83.9
94.4
Total
280.4
20.8
(20.8)
280.4
605.6
For Content, with a net impairment loss of £196.5 million, the range of net revenue growth
rates across the four-year forecast period is between (0.6%) and 10.0%, and the range of
EBITDA margin across the four-year forecast period is between 12.6% and 18.5%. A pre-
tax discount rate of 15.1% has been used, with a long-term growth rate of 2.0% applied in
perpetuity beyond the four-year explicit forecast period.
For Technology Services, with a net impairment loss of £83.9 million, the range of net
revenue growth rates across the four-year forecast period is between (4.9%) and 10.2%,
and the range of EBITDA margin across the four-year forecast period is between 15.7%
and 17.0%. A pre-tax discount rate of 13.4% has been used, with a long-term growth rate
of 2.0% applied in perpetuity beyond the four-year explicit forecast period.
Sensitivity analysis has been carried out for the value-in-use calculations of each CGU.
The following is a sensitivity analysis for impairment losses recognised in Content CGU
and Technology CGU, in the case of changes in the key assumptions. The consequential
impacts of the changes in net revenue growth and EBITDA margins on cash flow
assumptions including working capital movements and tax charges have been incorporated
into the sensitivity analyses set out below, but all other variables are held constant.
Net revenue growth 20% reduction1
£m
EBITDA margin 100bps reduction2
£m
Content
22.7
36.9
Technology Services
4.4
6.5
Notes:
1. A 20% reduction has been applied to net revenue growth rate in each year of the explicit forecast period, with the
long-term growth rate unchanged.
2. A 100 basis point reduction in EBITDA margin has been applied in each year of the forecast period, including in the
terminal period.
For Data&Digital Media, with a headroom of £1.1 million, the range of net revenue growth
rates across the four-year forecast period is between (0.6%) and 15.2%, and the range of
EBITDA margin across the four-year forecast period is between 16.0% and 19.0%. A pre-
tax discount rate of 14.3% has been used, with a long-term growth rate of 2.0% applied
in perpetuity beyond the four-year explicit forecast period. The recoverable amount would
equal the carrying amount either if net revenue growth range were to be reduced to a range
of (0.6%) to 14.9% (with margins remaining unchanged) or if EBITDA margin were to be
reduced to a range of 15.9% to 18.9% (with net revenue growth remaining unchanged).
The following is a sensitivity analysis for Data&Digital Media, in the case of changes in the
key assumptions. The consequential impacts of the changes in net revenue growth and
EBITDA margins on cash flow assumptions including working capital movements and tax
charges have been incorporated into the sensitivity analyses set out below, but all other
variables are held constant.
Net revenue growth 20% reduction1
£m
EBITDA margin 100bps reduction2
£m
Data&Digital Media
10.8
14.3
Notes:
1. A 20% reduction has been applied to net revenue growth rate in each year of the explicit forecast period, with the
long-term growth rate unchanged.
2. A 100 basis point reduction in EBITDA margin has been applied in each year of the forecast period, including in the
terminal period.
Notes to the consolidated financial statements continued
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11. Intangible assets
Cost
Customer
relationships
£m
Brands
£m
Order
backlog
£m
Other
£m
Total
£m
At 1 January 2023
531.8
26.1
0.5
18.4
576.8
Acquired through business combinations
0.6
–
–
–
0.6
Additions
–
–
–
2.1
2.1
Disposals
–
–
–
–
–
Foreign exchange differences
(21.8)
(1.0)
–
(0.8)
(23.6)
At 31 December 2023
510.6
25.1
0.5
19.7
555.9
Acquired through business combinations
–
–
–
–
–
Additions
–
–
–
4.2
4.2
Disposals
–
(8.4)
(0.3)
(0.1)
(8.8)
Foreign exchange differences
(4.0)
(0.7)
–
(0.2)
(4.9)
At 31 December 2024
506.6
16.0
0.2
23.6
546.4
Accumulated amortisation and impairment
Customer
relationships
£m
Brands
£m
Order
backlog
£m
Other
£m
Total
£m
At 1 January 2023
(108.2)
(12.8)
(0.4)
(10.2)
(131.6)
Charge for the year
(41.1)
(4.0)
(0.2)
(3.3)
(48.6)
Impairment
–
–
–
–
–
Disposals
–
–
–
–
–
Foreign exchange differences
4.7
0.6
0.1
0.5
5.9
At 31 December 2023
(144.6)
(16.2)
(0.5)
(13.0)
(174.3)
Charge for the year
(38.3)
(2.9)
–
(3.1)
(44.3)
Impairment
(20.8)
–
–
–
(20.8)
Disposals
–
8.4
0.3
0.1
8.8
Foreign exchange differences
(1.1)
0.4
–
0.1
(0.6)
At 31 December 2024
(204.8)
(10.3)
(0.2)
(15.9)
(231.2)
Net book value
At 31 December 2023
366.0
8.9
–
6.7
381.6
At 31 December 2024
301.8
5.7
–
7.7
315.2
Other intangibles relates mainly to software. The average remaining amortisation period of
intangible assets as at 31 December 2024 was 5.4 years (2023: 5.1 years).
The following table details individually material intangible assets by acquisition:
Acquisition
Customer
Relationships
£m
Remaining
useful life
MediaMonks
54.5
6–10 years
TheoremOne
43.8
5 years
Firewood
35.1
9 years
Decoded
32.7 10–11 years
MightyHive
23.1
5 years
Zemoga
22.2
11 years
Jam 3
14.8
10 years
Cashmere
14.2
9 years
XX Artists
9.9
5 years
Metric Theory
9.8
6 years
Raccoon
9.1
4–6 years
Circus
7.9
5 years
12. Leases
Right-of-use assets
2024
£m
2023
£m
Balance at 1 January
45.8
55.7
Acquired through business combinations
–
0.2
Additions
2.1
15.1
Impairments2
(5.3)
–
Disposals and modifications
5.8
(6.2)
Depreciation of right-of-use assets
(13.2)
(17.1)
Hyperinflation
1.8
2.9
Exchange rate differences
(2.3)
(4.8)
Balance at 31 December1
34.7
45.8
Notes to the consolidated financial statements continued
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Financial statements
12. Leases continued
Lease liabilities
2024
£m
2023
£m
Balance at 1 January
(49.0)
(58.4)
Acquired through business combinations
–
(0.2)
Additions
(2.0)
(14.0)
Disposals and modifications
(5.8)
6.2
Payment of lease liabilities
15.2
18.6
Interest on lease liabilities
(2.5)
(2.3)
Exchange rate differences
1.6
1.1
Balance at 31 December1
(42.5)
(49.0)
Non-current lease liabilities
(29.7)
(35.8)
Current lease liabilities
(12.8)
(13.2)
Balance at 31 December
(42.5)
(49.0)
Notes:
1. The right-of-use assets and lease liabilities primarily relate to offices.
2. Right-of-use asset impairments relate to leases impaired as part of the Group’s Property
Rationalisation Programme.
13. Property, plant and equipment
Cost
Leasehold
improvements
£m
Furniture and
fixtures
£m
Office
equipment
£m
Other
assets
£m
Total
£m
At 1 January 2023
18.2
5.0
33.2
1.8
58.2
Acquired through business
combinations
–
–
0.2
–
0.2
Additions
1.8
0.2
3.4
0.5
5.9
Hyperinflation
2.7
0.5
4.2
0.4
7.8
Disposals
(0.4)
–
(0.9)
(0.2)
(1.5)
Foreign exchange differences
(3.9)
(0.6)
(6.2)
(0.8)
(11.5)
At 31 December 2023
18.4
5.1
33.9
1.7
59.1
Acquired through business
combinations
–
–
–
–
–
Additions
0.7
0.2
3.1
–
4.0
Hyperinflation
1.8
0.3
2.7
0.4
5.2
Disposals
(1.3)
(0.2)
(2.8)
(0.2)
(4.5)
Foreign exchange differences
(1.3)
(0.2)
(1.9)
(0.3)
(3.7)
At 31 December 2024
18.3
5.2
35.0
1.6
60.1
Accumulated depreciation
and impairment
Leasehold
improvements
£m
Furniture and
fixtures
£m
Office
equipment
£m
Other
assets
£m
Total
£m
At 1 January 2023
(6.3)
(2.6)
(19.2)
(0.4)
(28.5)
Charge for the year
(3.9)
(0.8)
(6.9)
(0.6)
(12.2)
Hyperinflation
(1.0)
(0.1)
(3.1)
(0.1)
(4.3)
Disposals
0.4
–
0.9
0.2
1.5
Foreign exchange differences
2.0
0.1
4.0
0.2
6.3
At 31 December 2023
(8.8)
(3.4)
(24.3)
(0.7)
(37.2)
Charge for the year
(2.6)
(0.6)
(6.0)
(0.3)
(9.5)
Hyperinflation
(1.0)
(0.1)
(2.0)
(0.2)
(3.3)
Disposals
1.3
0.2
2.8
0.2
4.5
Foreign exchange differences
0.6
0.1
1.0
0.1
1.8
At 31 December 2024
(10.5)
(3.8)
(28.5)
(0.9)
(43.7)
Net book value
At 31 December 2023
9.6
1.7
9.6
1.0
21.9
At 31 December 2024
7.8
1.4
6.5
0.7
16.4
Notes to the consolidated financial statements continued
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Financial statements
Notes to the consolidated financial statements continued
14. Interest in joint ventures and associates
The Group, through its subsidiary S4Capital 2 Limited a directly owned subsidiary, together
with Stanhope Capital LLP (Stanhope LLP), through its subsidiary Portman Square General
Partner S.à r.l. (Stanhope), subscribed for the initial €6,000 of shares each to incorporate
S4S Ventures General Partner S.à r.l. (GP), a Luxembourg company. The GP also controls
S4S Ventures General Partner LLC. The GP has since established two S4S Ventures funds
established in Luxembourg and the US.
The Group has a 50% interest in the GP (2023: 50%), a joint venture whose primary
activity is to invest in technology companies focused on the marketing and advertising
industries, to focus on early-stage technology investments with the ability to transform
the sector. S4S aims to invest in companies across five principal areas: Martech, Adtech,
Data Technology, Creative Technology, and Emerging Digital Media/Content. The Group’s
interest is accounted for using the equity method in the consolidated financial statements.
The Group has a 25% interest in Hoorah, a South African based Company. Hoorah is a
full-service creative digital marketing agency specialising in creating impactful campaigns
that connect brands with their audiences. With a strong focus on innovation, data-driven
strategy, and creativity, Hoorah delivers results across social media, app development,
CRM, and content marketing.
Summarised financial information of the joint venture and associate, based on its IFRS
financial statements, and reconciliation with the carrying amount of the investment in the
consolidated financial statements are set out below:
Ownership
Nature of
relationship
2024
£m
2023
£m
S4S
50% Joint venture
0.1
0.2
Hoorah
25%
Associate
0.7
–
At 31 December
0.8
0.2
2024
S4S
£m
2024
Hoorah
£m
2024
Total
£m
2023
Total
£m
Balance at the beginning of the year
0.2
–
0.2
–
Investment in the year
–
0.7
0.7
–
Share of profits
0.1
–
0.1
0.2
Dividends
(0.2)
–
(0.2)
–
Balance at the end of the year
0.1
0.7
0.8
0.2
Summarised balance sheet:
2024
S4S
£m
2024
Hoorah
£m
2024
Total
£m
2023
Total
£m
Non-current assets
–
1.1
1.1
–
Current assets1
0.6
0.2
0.8
0.4
Current liabilities
(0.4)
(0.1)
(0.5)
(0.1)
Net assets
0.2
1.2
1.4
0.3
Group’s share of net assets
0.1
0.3
0.4
0.2
Goodwill
–
0.4
0.4
–
Group’s carrying amount of the investment
0.1
0.7
0.8
0.2
Note:
1. Includes cash and cash equivalents held by the joint venture of £0.2 million (2023: £0.1 million).
Summarised statement of profit or loss:
2024
S4S
£m
2024
Hoorah
£m
2024
Total
£m
2023
Total
£m
Revenue
1.0
0.9
1.9
1.1
Operating expense
(0.9)
(0.9)
(1.8)
(0.6)
Profit for the year
0.1
–
0.1
0.5
Other comprehensive expense
–
–
–
–
Total comprehensive income
0.1
–
0.1
0.5
Group’s share of joint venture and associate profit or loss:
2024
S4S
£m
2024
Hoorah
£m
2024
Total
£m
2023
Total
£m
Revenue
0.5
0.2
0.7
0.5
Operating expense
(0.4)
(0.2)
(0.6)
(0.3)
Profit for the year
0.1
–
0.1
0.2
Total comprehensive income
0.1
–
0.1
0.2
Group’s share of joint venture/associate profit
0.1
–
0.1
0.2
The joint venture had no other contingent liabilities or commitments as at 31 December
2024 (2023: £nil).
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15. Deferred tax assets and liabilities
Deferred tax assets
Goodwill
and
intangible
assets
£m
Leases and
Property,
plant and
equipment1
£m
Short term
differences
£m
Losses
£m
Total
£m
Offset2
£m
Net
deferred
tax assets
£m
At 1 January 20233
46.6
11.6
9.3
–
67.5 (52.6)
14.9
Credited to profit
or loss
(0.3)
5.1
4.9
–
9.7
–
9.7
Foreign exchange
differences
(0.5)
(1.6)
(0.5)
–
(2.6)
–
(2.6)
At 31 December
20233
45.8
15.1
13.7
–
74.6 (49.9)
24.7
Reclassification
–
(0.5)
(0.7)
0.7
(0.5)
–
(0.5)
Credited to profit
or loss4
15.3
(3.0)
2.6
3.1
18.0
–
18.0
Foreign exchange
differences
(0.1)
(0.9)
0.1
–
(0.9)
–
(0.9)
At 31 December
2024
61.0
10.7
15.7
3.8
91.2
(42.2)
49.0
Deferred tax liabilities
Goodwill
and
intangible
assets
£m
Leases and
Property,
plant and
equipment1
£m
Short term
differences
£m
Total
£m
Offset2
£m
Net deferred
tax liabilities
£m
At 1 January 20233
(69.7)
–
(11.4)
(81.1)
52.6
(28.5)
Acquired through
business combinations
(0.2)
–
–
(0.2)
–
(0.2)
Credited to profit or loss
7.5
–
(3.0)
4.5
–
4.5
Foreign exchange
differences
1.8
–
1.0
2.8
–
2.8
At 31 December 20233
(60.6)
–
(13.4)
(74.0)
49.9
(24.1)
Reclassification
–
–
0.5
0.5
–
0.5
Credited to profit or loss5
6.6
–
4.5
11.1
–
11.1
Foreign exchange
differences
0.9
–
0.7
1.6
–
1.6
At 31 December 2024
(53.1)
–
(7.7)
(60.8)
42.2
(18.6)
Notes:
1. Includes deferred tax assets recognised on lease liabilities and dilapidation provisions of
£10.1 million (2023: £13.1 million) and deferred tax liabilities recognised on right-of-use assets of £7.6 million
(2023: £11.8 million).
2. Where there is a right of offset, any deferred tax assets and deferred tax liabilities within the same tax jurisdiction
have been offset.
3. The comparatives as at 1 January 2023 and 31 December 2023 have been restated to account for the recognition of
deferred tax balances related to certain business combinations in the prior years (see Note 2).
4. Includes a credit to the profit and loss account of £15.4 million in respect of the movement in deferred tax assets
attributable to the impairment of goodwill and intangible assets.
5. Includes a credit to the profit and loss account of £5.4 million in respect of the movement in deferred tax liabilities
attributable to the impairment of goodwill and intangible assets.
Recognition of the deferred tax assets is based upon the expected generation of future
taxable profits. Our expectation is based on long-term planning. The deferred tax assets
are expected to be recovered in more than one year’s time and the deferred tax liabilities
will reverse in more than one year’s time as the intangible assets are amortised.
The value of unrecognised deferred tax assets on future losses is £3.5 million
(2023: £2.0 million). The value of unrecognised deferred tax assets on future tax-
deductible goodwill is £18.4 million (2023: £23.9 million).
Notes to the consolidated financial statements continued
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Financial statements
16. Trade and other receivables
2024
£m
2023
£m
Trade receivables
364.7
346.8
Prepayments
16.0
13.1
Accrued income
31.1
28.2
Other receivables
48.2
33.1
Total
460.0
421.2
Included in current assets
450.8
407.5
Included in non-current assets
9.2
13.7
Total
460.0
421.2
17. Cash and cash equivalents
The cash and cash equivalents in the statement of cash flows is made up as follows:
2024
£m
2023
£m
Cash and bank
168.4
145.7
Cash and cash equivalents
168.4
145.7
18. Trade and other payables
2024
£m
2023
£m
Trade payables
(236.7)
(249.1)
Accruals
(158.7)
(90.9)
Deferred income1
(49.6)
(53.6)
Sales taxes
(12.6)
(7.9)
Wage taxes and social security contributions
(7.0)
(7.7)
Other payables
(17.4)
(8.9)
Total
(482.0)
(418.1)
Included in current liabilities
(482.0)
(418.1)
Total
(482.0)
(418.1)
Note:
1. The deferred income as at 31 December 2023 has been fully recognised in the consolidated statement of profit or
loss of 2024.
19. Loans and borrowings
Loans and borrowings
Bank loans
£m
Senior
secured term
loan B (TLB)
£m
Transaction
costs
£m
Interest
payable on
Facilities
Agreement
£m
Total
£m
Balance at 1 January 2023
(0.6)
(332.5)
6.9
(0.7)
(326.9)
Acquired through
business combinations
–
–
–
–
–
Repayments
0.2
–
–
23.1
23.3
Charged to profit or loss
–
–
(1.4)
(22.7)
(24.1)
Exchange rate differences
–
6.6
(0.1)
0.1
6.6
Total transactions during the year
0.2
6.6
(1.5)
0.5
5.8
At 31 December 2023
(0.4)
(325.9)
5.4
(0.2)
(321.1)
Acquired through
business combinations
–
–
–
–
–
Repayments
0.2
–
–
23.8
24.0
Charged to profit or loss
–
–
(1.3)
(23.8)
(25.1)
Exchange rate differences
–
15.0
(0.2)
–
14.8
Total transactions during the year
0.2
15.0
(1.5)
–
13.7
At 31 December 2024
(0.2)
(310.9)
3.9
(0.2)
(307.4)
Included in current liabilities
–
–
–
(0.2)
(0.2)
Included in non-current liabilities
(0.2)
(310.9)
3.9
–
(307.2)
A.
Facility agreement
S4Capital Group has a facility agreement, consisting of a Term Loan B (TLB) of
EUR375 million and a multicurrency Revolving Credit Facility (RCF) of £100 million.
During 2024, the RCF remained fully undrawn (2023: fully undrawn). The interest on TLB is
the aggregate of the variable interest rate (EURIBOR) and a 3.75% margin. The interest on
the multicurrency RCF facility is the aggregate of the variable interest rate (EURIBOR or, in
relation to any loan in GBP, SONIA) and a margin range from 2.25% to 3.25% depending
on the leverage. The duration of the facility agreement is seven years in relation to the
TLB, therefore the termination date is August 2028. Post year end, £80 million of the RCF
facility has been extended to February 2028, with the remaining £20 million terminating in
August 2026.
Notes to the consolidated financial statements continued
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Financial statements
19. Loans and borrowings continued
A.
Facility agreement continued
During the reporting period, the average interest rate of the outstanding loans amounted
to 6.92% (2023: 7.61%). The average effective interest rate for the outstanding loans
is 7.36% (2023: 6.85%) and during the period interest expense of £23.8 million was
recognised (2023: £22.7 million).
The facility agreement imposes certain covenants on the Group. S4Capital Group will
ensure that the net debt will not exceed 4.5:1 of the pro-forma earnings before interest, tax,
depreciation, and amortisation, 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.
During the year S4Capital Group complied with the covenants set in the loan agreement.
Certain subsidiaries of S4Capital Group guarantee its principal debt obligation and are
obligors under the facility agreement.
20. Financial instruments
The Board of Directors of S4Capital plc has overall responsibility for the determination
of the Group’s risk management objectives and policies. The overall objective of the
Board is to set policies that seek to reduce risk as far as possible without unduly affecting
the Group’s competitiveness and flexibility. S4Capital Group reports in Pound Sterling.
All funding requirements and financial risks are managed based on policies and procedures
adopted by the Board. S4Capital Group does not issue or use financial instruments of a
speculative nature.
S4Capital Group is exposed to the following financial risks:
• Market risk;
• Credit risk; and
• Liquidity risk.
The Group is exposed to risks that arise from its use of financial instruments. The principal
financial instruments used by the Group, from which financial instrument risk arises,
are trade and other receivables, cash and cash equivalents, accrued income, trade and
other payables, loans and borrowings, contingent consideration and lease liabilities.
Fair values of the Group’s financial assets and liabilities are categorised into different levels
in a fair value hierarchy based on inputs used in the valuation techniques.
To the extent financial instruments are not carried at fair value in the consolidated balance
sheet, the carrying amount approximates to fair value as of the financial year end due to
being short term in nature.
Financial instruments by category
Financial assets
2024
£m
2023
£m
Financial assets held at amortised cost
Cash and cash equivalents
168.4
145.7
Trade receivables
364.7
346.8
Accrued income
31.1
28.2
Other receivables
48.2
33.1
Total
612.4
553.8
Financial liabilities
2024
£m
2023
£m
Financial liabilities held at amortised cost
Trade and other payables
(412.8)
(348.9)
Loans and borrowings
(307.4)
(321.1)
Lease liabilities
(42.5)
(49.0)
Financial liabilities held at fair value through profit or loss
Contingent consideration and holdbacks
(9.5)
(25.5)
Total
(772.2)
(744.5)
The following table categorises the Group’s financial liabilities held at fair value on the
consolidated balance sheet. There have been no transfers between levels during the year
(2023: none).
Financial liabilities held at fair value
2024
Fair value
£m
2024
Level 3
£m
2023
Fair value
£m
2023
Level 3
£m
Contingent consideration and holdbacks
(9.5)
(9.5)
(25.5)
(25.5)
Total
(9.5)
(9.5)
(25.5)
(25.5)
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
20. Financial instruments continued
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 2023
(10.9)
(151.7)
(26.0)
(188.6)
Acquired through business
combinations
(0.4)
–
–
(0.4)
Recognised in consolidated statement
of profit or loss2
1.6
4.1
5.8
11.5
Cash paid
–
77.7
5.9
83.6
Equity settlement
–
62.3
0.4
62.7
Exchange rate differences
0.7
4.6
0.4
5.7
Balance at 31 December 2023
(9.0)
(3.0)
(13.5)
(25.5)
Acquired through business
combinations
–
–
–
–
Recognised in consolidated statement
of profit or loss2
–
(0.7)
3.0
2.3
Cash paid
6.7
2.9
3.9
13.5
Equity settlement
–
–
0.2
0.2
Exchange rate differences
(0.1)
–
0.1
–
Balance at 31 December 2024
(2.4)
(0.8)
(6.3)
(9.5)
Include in current liabilities
(8.6)
(3.0)
(6.6)
(18.2)
Included in non-current liabilities
(0.4)
–
(6.9)
(7.3)
Balance at 31 December 2023
(9.0)
(3.0)
(13.5)
(25.5)
Include in current liabilities
(2.4)
(0.8)
(1.5)
(4.7)
Included in non-current liabilities
–
–
(4.8)
(4.8)
Balance at 31 December 2024
(2.4)
(0.8)
(6.3)
(9.5)
Notes:
1. Holdback payments of £3.9 million (2023: £5.9 million) includes £3.9 million (2023: £3.3 million) of cash paid out
escrow accounts.
2. Includes a charge of £0.7 million (2023: £13.2 million) relating to employment linked contingent consideration and
holdback deemed remuneration and a credit of £3.0 million relating to a fair value gain (2023: £24.7 million).
Where the contingent consideration conditions have been satisfied, consideration that is
payable as equity is recognised within Other Reserves as deferred equity consideration.
See Note 21.
The fair value of the performance linked contingent consideration has been determined
based on management’s best estimate of achieving future targets to which the consideration
is linked. The most significant unobservable input used in the fair value measurements is
the future forecast 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 consolidated statement of profit or loss as a fair value gain or loss.
During the year ended 31 December 2024, a fair value gain of £nil (2023: £1.6 million)
was recognised in the consolidated statement of profit or loss.
The fair value of the employment linked contingent consideration has been determined
based on management’s best estimate of achieving future targets to which the
consideration is linked. The most significant unobservable input used in the fair value
measurements is the future forecast performance of the acquired business. The fair
value is assessed at the acquisition date, and systematically accrued over the respective
employment term. Any changes in the range of future outcomes are recognised in the
consolidated statement of profit or loss as a fair value gain or loss. During the year ended
31 December 2024, a £0.7 million charge (2023: £4.1 million credit) was recognised in
the consolidated statement of profit or loss. The £0.7 million (2023: £4.1 million credit)
comprised a charge of £0.7 million (2023: £13.2 million) relating to the systematic
accrual of the employment linked contingent consideration and a fair value gain of £nil
(2023: £17.3 million).
Holdbacks relate to amounts held by the Group to cover and indemnify the Group
against certain acquisition costs and any damages. The fair value of the holdbacks
has been determined based on management’s best estimate of the level of the costs
incurred and any damages expected to which the holdback is linked, which is the most
significant unobservable input used in the fair value measurement. During the year ended
31 December 2024, a credit of £3.0 million (2023: £5.8 million credit) has been recognised
in the consolidated statement of profit or loss, which related to holdbacks liabilities linked to
employment. No further amounts are to be charged to the consolidated statement of profit
or loss.
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
144
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
20. Financial instruments continued
A.
Market risk
Market risk arises from the Group’s use of interest bearing and foreign currency financial
instruments. It is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in interest rates (interest rate risk) or foreign exchange rates
(currency risk).
Interest rate risk
S4Capital Group is exposed to cash flow interest rate risk from bank borrowings at variable
rates. S4Capital Group’s bank loans and other borrowings are disclosed in Note 19.
S4Capital Group manages the interest rate risk centrally.
The Group’s treasury function reviews its risk management strategy on a regular basis and
will, as appropriate, enter into derivative financial instruments in order to manage interest
rate risk.
The following table demonstrates the sensitivity to a 1% change (lower/higher) to the
interest rates of the loans and borrowings as of year end to the loss in the current year
before tax (increase/decrease) and net assets (increase/decrease) for the year if all other
variables are held constant:
2024
£m
2023
£m
Bank loans
311.1
326.3
+/- 1% impact
3.1
3.3
The contractual repricing or maturity dates, whichever dates are earlier, and effective
interest rates of borrowings are disclosed in Note 19.
Foreign exchange risk
Foreign exchange risk is the risk that movements in exchange rates affect the profitability
of the business. Management estimate that for a one cent change in the exchange
rate between USD and GBP, net revenue will change by approximately £4.0 million,
and operational EBITDA will change by approximately £1.4 million. S4Capital Group
manages this risk through natural hedging. The effect of fluctuations in exchange rates
on the USD, EUR and other currencies denominated trade receivables and payables is
partially offset.
The Group considers the need to hedge its exposure as appropriate and, if needed, will
enter into forward foreign exchange contracts to mitigate any significant risks.
The S4Capital Group’s gross exposure to foreign exchange risk is as follows:
At 31 December 2024
GBP
£m
USD
£m
EUR
£m
Other
currencies
£m
Total
£m
Trade receivables
10.2
276.4
27.4
50.7
364.7
Cash and cash equivalents
(4.0)
83.5
26.0
62.9
168.4
Trade payables
(5.9)
(178.0)
(16.4)
(36.4)
(236.7)
Loans and borrowings
–
–
(311.3)
–
(311.3)
Financial assets/(liabilities)
0.3
181.9
(274.3)
77.2
(14.9)
+/- 10% impact
–
18.2
(27.4)
7.7
(1.5)
At 31 December 2023
GBP
£m
USD
£m
EUR
£m
Other
currencies
£m
Total
£m
Trade receivables
14.8
241.9
36.6
53.5
346.8
Cash and cash equivalents
(23.8)
91.2
15.1
63.2
145.7
Trade payables
(9.5)
(175.1)
(20.3)
(44.2)
(249.1)
Loans and borrowings
–
–
(326.5)
–
(326.5)
Financial assets/(liabilities)
(18.5)
158.0
(295.1)
72.5
(83.1)
+/- 10% impact
–
15.8
(29.5)
7.3
(6.4)
B.
Credit risk
Credit risk is the risk of financial loss to S4Capital Group if a customer or counterparty to a
financial instrument fails to meet its contractual obligations. S4Capital Group is exposed to
credit risk primarily attributable to its receivable balance from customers. The Group’s net
trade receivables for the reported periods are disclosed in the financial assets table above.
S4Capital Group attempts to mitigate credit risk by assessing the credit rating of new
customers prior to entering into contracts and by entering contracts with customers with
agreed credit terms. In order to minimise this credit risk, S4Capital Group endeavours only
to deal with companies which are demonstrably creditworthy and this, together with the
aggregate financial exposure, is continuously monitored. The maximum exposure to credit
risk is the value of the outstanding amount. S4Capital Group evaluates the collectability of
its accounts receivable and provides an allowance for expected credit losses based upon
the ageing of receivables.
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
145
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
20. Financial instruments continued
B.
Credit risk continued
The Group applies the IFRS 9 simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables. The loss allowance
for other receivables is based on the three stage expected credit loss model. No other
receivables have had material impairment.
To measure the expected credit losses, trade receivables have been grouped based on
shared credit risk characteristics and the days past due. The expected loss rates are based
on the payment profiles of sales over a period of 36 months before the end of the period
and the corresponding historical credit losses experienced within this period. The Group’s
assessment of expected credit losses includes provisions for specific clients and receivables
where the contractual cash flow is deemed at risk. Considerations include the current
economic environment along with historical loss rates for each category of customers.
The Group has identified the current and future health of the economy (such as market
interest rates and growth rates), of the countries in which it sells its services to be the
most relevant factors and accordingly adjusts the historical loss rates based on expected
changes in these factors. Additional provisions are made based on the assessment of
recoverability of aged receivables where sufficient evidence of recoverability is not evident.
On that basis, the loss allowance for trade receivables is determined as follows:
Trade receivables
Expected Credit
Loss Rate
Gross trade
receivables
£m
Impairment
provision
£m
Net trade
receivables
£m
Not passed due
0.20–0.25%
286.0
(0.6)
285.4
Past due 1 day to 30 days
0.40–0.50%
49.4
(0.2)
49.2
Past due 31 days to 60 days
0.60–1.00%
16.0
(0.1)
15.9
Past due 61 days to 90 days
0.80–2.00%
4.0
(0.1)
3.9
Past due more than 90 days
1.00–7.50%
8.8
(0.4)
8.4
Specific provisions against
individual debtors
up to 100%
4.3
(2.4)
1.9
Balance at 31 December 2024
368.5
(3.8)
364.7
Trade receivables
Expected Credit
Loss Rate
Gross trade
receivables
£m
Impairment
provision
£m
Net trade
receivables
£m
Not passed due
0.20–0.25%
273.6
(0.6)
273.0
Past due 1 day to 30 days
0.40–0.50%
54.1
(0.3)
53.8
Past due 31 days to 60 days
0.60–1.00%
7.3
(0.1)
7.2
Past due 61 days to 90 days
0.80–2.00%
3.3
(0.1)
3.2
Past due more than 90 days
1.00–7.50%
10.1
(0.5)
9.6
Specific provisions against
individual debtors
up to 100%
7.4
(7.4)
–
Balance at 31 December 2023
355.8
(9.0)
346.8
Trade receivables are written off when there is no reasonable expectation of recovery.
The Group has a process of assessing the creditworthiness of customers which includes
review of payment history, external credit ratings, industry specific risks, review of financial
statements, monitoring of market news and developments and direct communication
with customers to identify early signs of payment difficulties. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to
engage in a repayment plan with S4Capital Group.
The changes in the loss allowance for trade receivables is as follows:
2024
£m
2023
£m
Balance at the beginning of the year
9.0
5.8
Utilised during the period
(6.6)
(0.4)
Charge for the year
1.4
3.6
Balance at the end of the year
3.8
9.0
Due to the short-term nature of the trade and other receivables, their carrying amount is
considered to be the same as their fair value.
Expected credit losses on accrued income and other receivables were immaterial for the
years presented.
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
146
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
20. Financial instruments continued
B.
Credit risk continued
Credit risk on cash and cash equivalents is considered to be small as the majority of external
counterparties are substantial banks with high credit ratings assigned by international credit
rating agencies and are managed through regular review. As per the end of the reporting
period, credit ratings are summarised in the table below:
2024
£m
2023
£m
Aa 1
4.9
–
Aa2
85.8
66.4
Aa3
24.5
33.6
A 1
15.4
23.8
A 2
23.7
3.9
A 3
5.1
5.1
Baa 1
–
0.2
Baa 2
1.3
0.7
Ba 1
2.3
2.9
No credit rating
5.4
9.1
Total cash and cash equivalents
168.4
145.7
The maximum exposure is the amount of the deposit. To date, S4Capital Group has not
experienced any losses on its cash and cash equivalent deposits.
Other receivables primarily comprise escrow account balances held against holdbacks and
lease rental deposits. The credit risk on most of these balances are limited as the balances
are held with banks which have high credit ratings, and the Group has not experienced any
losses on the other receivables.
C.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that
S4Capital Group will encounter difficulty in meeting its financial obligations as they fall due.
The Group monitors its liquidity risk using a cash flow projection model which considers the
maturity of the Group’s assets and liabilities and the projected cash flows from operations.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its
liabilities when they become due. The table below analyses the Group’s financial liabilities
by contractual maturities and all amounts disclosed in the table are the undiscounted
contractual cash flows:
At 31 December 2024
Within 1 year
£m
1–2 years
£m
2–5 years
£m
More than 5
years
£m
Trade payables
236.7
–
–
–
Lease liabilities
14.7
12.9
18.2
1.1
Contingent consideration and
holdbacks
4.7
4.8
–
–
Loans and borrowings
0.2
–
310.9
–
Interest payments
23.8
23.8
38.3
–
Total
280.1
41.5
367.4
1.1
At 31 December 2023
Within 1 year
£m
1–2 years
£m
2–5 years
£m
More than 5
years
£m
Trade payables
249.1
–
–
–
Lease liabilities
15.7
13.9
31.0
1.2
Contingent consideration and
holdbacks
18.2
7.3
–
–
Loans and borrowings
0.2
0.2
325.9
–
Interest payments
23.0
23.0
59.6
–
Total
306.2
44.4
416.5
1.2
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
147
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
20. Financial instruments continued
D.
Capital management
The Group’s objectives when maintaining capital are:
• to safeguard the entity’s ability to continue as a going concern, so that it can continue
to provide returns for shareowners and benefits for other stakeholders; and
• to provide an adequate return to shareowners by pricing products and services
commensurately with the level of risk.
The risks to safeguard the ability to continue as a going concern and to provide an
adequate return to our shareowners are reviewed and discussed regularly by the Board in
order to meet our objectives.
As per the end of the reporting period, the Group’s net debt position is made up as follows:
2024
£m
2023
£m
Loans and borrowings
(311.3)
(326.5)
Cash and bank
168.4
145.7
Total
(142.9)
(180.8)
Changes in loans and borrowings is disclosed further in Note 19.
The Group’s capital as at the end of the reporting period is disclosed on page 117.
The capital structure of S4Capital Group consists of shareowners’ equity as set out in the
consolidated statement of changes in equity. All working capital requirements are financed
from existing cash resources and borrowings. The Group is not subject to externally
imposed regulatory capital requirements.
21. Equity
A.
Share capital and share premium
The authorised share capital of S4Capital plc contains an unlimited number of Ordinary
Shares having a nominal value of £0.25 per Ordinary Share. At the end of the reporting
period, the issued and paid up share capital of S4Capital plc consisted of 619,636,656
(2023: 583,064,256) Ordinary Shares having a nominal value of £0.25 per Ordinary Share.
On 28 September 2018 S4Capital issued 1 B share at a price of 100 pence per share to Sir
Martin Sorrell. See the Governance Report on page 71 for details.
The share premium is net of costs directly relating to the issuance of shares. In accordance
with Section 612 of the Companies Act 2006, merger relief has been applied on share
for share exchanges. No share issuances in the current or prior period qualified for
merger relief.
Amount subscribed for share capital in excess of nominal value less transaction costs.
During the year ended 31 December 2024, £9.0 million and £84.5 million has been
credited to share capital and share premium in relation to the deferred equity consideration
and contingent consideration which have been issued during the period. The amounts
credited to share capital and share premium comprise of TheoremOne (£4.7 million
and £49.6 million respectively), Raccoon (£2.7 million and £23.5 million respectively),
XX Artists (£0.8 million and £6.7 million respectively), Zemoga (£0.3 million and £2.0 million
respectively), 4 Mile (£0.2 million and £2.3 million respectively), Hoorah (£0.3 million and
£0.3 million respectively) and Destined (£nil and £0.1 million respectively).
During the year ended 31 December 2023, £3.9 million and £74.5 million was credited
to share capital and share premium in relation to the deferred equity consideration and
contingent consideration which were issued during the period. The amounts credited to
share capital and share premium comprised of Decoded (£2.3 million and £45.6 million
respectively), Raccoon (£0.8 million and £16.1 million respectively), Cashmere (£0.3 million
and £6.8 million respectively), Zemoga (£0.3 million and £5.3 million respectively), and
Miyagi (£0.2 million and £0.7 million respectively).
B.
Reserves
The following describes the nature and purpose of each reserve within equity:
Merger reserves
by merger relief
Amount subscribed for share capital in excess of nominal value less
transaction costs as required by merger relief. Further details are in
section D.
Other reserves
Other reserves include treasury shares issued in the name of
S4Capital plc to an employee benefit trust, EBT pool C and
MightyHive. Included within other reserves is the deferred equity
consideration relating to the initial deferred equity consideration and
deferred equity consideration following the achievement of contingent
consideration criteria.
Foreign exchange
reserves
Legal reserve for foreign exchange translation gains and losses on
the translation of the financial statements of a subsidiary from the
functional to the presentation currency.
Retained earnings
Retained earnings represents the net gain for the year and all other
net gains and losses and transactions with shareowners (example
dividends) not recognised elsewhere.
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
148
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
21. Equity continued
B.
Reserves continued
The following table shows the amount of deferred equity consideration, and number of
shares, held in other reserves by acquisition.
2024
£m
2024
shares
2023
£m
2023
shares
TheoremOne
26.4 20,974,897
81.4
40,217,125
Raccoon
17.4 18,345,301
43.6
29,217,838
XX Artists
17.5 17,987,325
25.3
21,384,430
Zemoga
–
–
3.4
1,629,599
4 Mile
–
–
2.3
441,623
Destined
–
–
0.2
66,921
Total
61.3 57,307,523
156.2
92,957,536
C.
Non-controlling interest
On 24 May 2018, non-controlling interests arose as a result of the issuance of 4,000 A2
incentive shares by S4Capital 2 Limited subscribed at fair value for £0.1 million and paid
in full.
The incentive shares provide a financial reward to executives of S4Capital Group for
delivering shareowner value, conditional on achieving a preferred rate of return. The incentive
shares entitle the holders, subject to certain performance conditions and leaver provisions,
up to 15%, of the growth in value of S4Capital 2 Limited provided that certain performance
conditions have been met. Further details are within the Remuneration Report on page 96.
D.
Share capital and merger reserve realisation
On 13 September 2022, the Group undertook a reduction of capital to effect the cancellation
of: (i) the C Ordinary Shares resulting from the capitalisation of the sum of £205,717,000
standing to the credit of the Company’s merger reserve and; (ii) the entire amount standing
to the credit of the Company’s share premium account (the Capital Reduction) at that date,
in order to create distributable reserves.
The Capital Reduction was approved by shareowners at the Company’s Annual General
Meeting held on 16 June 2022. As announced on 13 September 2022, the Capital Reduction
was approved by the High Court of Justice of England and Wales on 13 September 2022 and
was registered by the Registrar of Companies on 21 September 2022. This will provide the
Group with the flexibility to make future purchases of its own shares and/or to make future
ordinary course dividends. The Board continues to review the advisability of declaring a
modest dividend in future.
22. Dividends
For both the current and prior year, no dividends were paid by S4Capital plc to its
shareowners. On the 23 March 2025 the Board proposed to pay a final dividend of 1p
per share, amounting to £6.1 million, subject to shareowner approval. This will be paid on
10 July 2025 to all shareowners on the register as at 6 June 2025.
23. Share-based payments
As at 31 December 2024, a total number of 1,045,250 (31 December 2023: 4,956,597)
shares are held by the Equity Benefit Trust (EBT). The EBT will be used for future option
schemes and bonus shares for employees.
Awards movement during the
reporting period
Employee
Share
Ownership
Plan
m
Restricted
stock units
m
All-
employee
incentive
plan
m
A1 incentive
share options
m
Total
m
Outstanding at 1 January 2023
15.9
1.9
0.6
–
18.4
Granted
16.2
–
–
–
16.2
Exercised
(1.8)
(0.6)
–
–
(2.4)
Lapsed
(4.9)
–
(0.1)
–
(5.0)
Outstanding at 31 December 2023
25.4
1.3
0.5
–
27.2
Granted
24.4
–
–
–
24.4
Exercised
(3.7)
(0.2)
–
–
(3.9)
Lapsed
(10.3)
(0.2)
–
–
(10.5)
Outstanding at 31 December 2024
35.8
0.9
0.5
–
37.2
Exercisable at 31 December 2024
4.3
0.9
0.5
–
5.7
Within 1 year
3.6
–
–
–
3.6
1–2 years
15.9
–
–
–
15.9
2–5 years
12.0
–
–
–
12.0
Outstanding at 31 December 2024
35.8
0.9
0.5
–
37.2
Employee Share Ownership Plan (ESOP) – previously known as Discretionary Share Option
Plan (DSOP)
In 2021, the S4Capital Group Board approved employee option schemes for key employees
of 3,124,241 options over S4Capital plc Ordinary Shares with an exercise price of between
£nil and £8.04 and a maximum term of six years. In 2022 6,741,277 options were approved
by the Board with an exercise price in the range between £nil and £5.72 and a maximum
term of four years. In 2023 an additional 4,575,606 options were approved by the Board
with an exercise price in the range between £nil and £5.60 and a maximum term of 3 years.
In 2024 an additional 9,375,889 options were approved by the Board with an exercise price
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
149
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
23. Share-based payments continued
in the range between £nil and £2.00 and a maximum term of 3 years. In accordance with
IFRS 2, the Group recognises share-based payment charges from the date of granting
the option plans until the vesting of the option plans. Vesting of the options are subject to
S4Capital Group achieving year on year business performance targets and options holders
achieving personnel performance targets with continued employment. During 2024,
3,742,510 (2023: 1,799,929) options were exercised with an average weighted exercise
price of £nil.
During 2024 a total charge of £3.7 million (2023: £4.7 million) was recognised in relation to
the ESOP and DSOP.
Long Term Incentive Plan (LTIP)
In 2023, the S4Capital Group Board approved a long term incentive plan for key employees
of 11,639,329 options over S4Capital plc Ordinary Shares with an exercise price of between
£1.17 and £2.00 and a maximum term of three years. During 2024, 15,037,796 options
have been approved by the Board with an exercise price of between £nil and £2.00 and
a maximum term of 3 years. In accordance with IFRS 2, the Group recognises share-
based payment charges from the date of granting the option plans until the vesting of the
option plans. Vesting of the options are subject to S4Capital Group achieving year on year
business performance targets and options holders achieving performance targets with
continued employment. During 2024, nil options were exercised.
During 2024 a total charge of £1.2 million (2023: £0.8 million) is recognised in relation to
the LTIP.
Restricted Stock Units (RSUs)
In December 2018, the S4Capital Group Board approved an employee option scheme
of 8,952,610 RSUs over S4Capital plc Ordinary Shares. During 2019 to 2024 no RSUs
were approved. In accordance with IFRS 2, the Group recognises a share-based payment
charge from grant date until vesting date in relation to this option plan. Vesting of the RSUs
are subject to continued employment and have a maximum term of 4 years. During the
reporting period a total of 163,294 shares (2023: 589,387) were exercised by employees
with an average exercise price of nil pence.
During 2024 a total charge of £nil (2023: £0.1 million) is recognised in relation to the
RSU plan.
A1 incentive share options
In 2019, the S4Capital Group Board approved 2,000 options over A1 incentive shares
in S4Capital 2 Limited to executives. In accordance with IFRS 2, the Group recognises
share-based payment charges from the date of granting the option plans till the moment of
vesting of the option plans. During 2024 a total charge of £1.9 million (2023: £4.5 million)
is recognised in relation to the A1 incentive share options. Full disclosure of these options is
contained within the Remuneration Report on page 96. These shares are potentially dilutive
for the purposes of calculating diluted EPS if the Company were to recognise a profit in
future years and if the growth target (as detailed on page 96) is met.
All-employee incentive plan
In 2019, the S4Capital Group Board approved an employee option scheme of 873,500
options, with an average exercise price of nil pence, over S4Capital Ordinary Shares for all
employees employed by the S4Capital Group at 30 November 2018. Based on the number
of years service at Media.Monks Group all employees received a set amount of options over
S4Capital Ordinary Shares. In accordance with IFRS 2, the Group recognised a share-
based payment charge from January 2019 until vesting date in relation to this option plan.
Vesting of the options are subject to continued employment and have a maximum term
of 6 years. During 2024 £nil (2023 :£nil) was recognised in relation to the all-employee
incentive plan.
A credit of £0.3 million (2023: £nil) has been taken in the year in relation to employer social
security costs on share-based payment schemes.
Valuation methodology
For all of these schemes, the valuation methodology is based upon fair value on grant date,
which is determined by the market price on that date or the application of a Black-Scholes
or Monte-Carlo model, depending upon the characteristics of the scheme concerned.
The assumptions underlying the models are detailed below. Market price on any given
day is obtained from external, publicly available sources.
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
150
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
23. Share-based payments continued
During 2024, 24,413,685 granted options in the ESOP and LTIP plans have an exercise
price in the range between £nil and £2.00. The weighted average fair value of options
granted in the year was as follows:
2024
Weighted average of fair value of options
£0.22
Weighted average assumptions
Risk free rate
1.0%
Expected life (years)
0.6
Expected volatility
19.4%
Dividend yield
n/a
The weighted average exercise price of options outstanding at the beginning of the
financial year was £0.53. The weighted average exercise price of options forfeited during
the year ended 31 December 2024 was £0.45 (2023: £1.14).
Expected life is the weighted average life across all shares granted. Expected volatility is
sourced from external market data and represents the historical volatility of share prices
of comparable company datasets over a period equivalent to the expected option life.
The options were exercised on a regular basis during the period; the average share price
in 2024 was £0.45 (2023: £1.24).
The range of exercise prices of the share options outstanding as at 31 December 2024
outstanding and the weighted average remaining contractual life were as follows:
Number of
options
Exercise price
Weighted
remaining
contractual life
Share options outstanding
67,315
–
9.58
Share options outstanding
3,315,024
–
1.11
Share options outstanding
14,067,379
–
2.14
Share options outstanding
616,620
41
9.24
Share options outstanding
106,539
117
8.59
Share options outstanding
167,000
127
8.54
Share options outstanding
226,339
142
1.67
Share options outstanding
50,000
149
7.75
Share options outstanding
337,861
151
7.59
Share options outstanding
418,043
180
4.10
Share options outstanding
13,848,924
200
8.95
Share options outstanding
2,089,569
237
6.56
Share options outstanding
9,977
322
8.38
Share options outstanding
39,766
377
7.84
Share options outstanding
52,375
382
6.12
Share options outstanding
32,538
399
7.94
Share options outstanding
2,939
426
8.63
Share options outstanding
40,000
488
5.31
Share options outstanding
161,533
502
5.32
Share options outstanding
10,500
526
6.45
Share options outstanding
44,500
536
6.48
Share options outstanding
19,134
554
5.42
Share options outstanding
49,500
605
6.91
Share options outstanding
14,988
804
5.04
Total share options outstanding
35,788,363
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
151
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
24. Net debt reconciliation
The following table shows the reconciliation of net cash flow to movements in net debt:
Borrowings
and overdraft
£m
Cash
£m
Net debt
£m
Leases
£m
Net debt
including lease
liabilities
£m
Net debt as at 1 January 2023
(333.8)
223.6
(110.2)
(58.4)
(168.6)
Financing cash flows
0.2
(67.0)
(66.8)
16.3
(50.5)
Acquired through business
combinations
–
–
–
(0.2)
(0.2)
Lease additions
–
–
–
(14.0)
(14.0)
Foreign exchange adjustments
6.8
(10.9)
(4.1)
1.1
(3.0)
Interest expense
(22.7)
–
(22.7)
(2.3)
(25.0)
Interest payment
23.1
–
23.1
2.3
25.4
Other
(0.1)
–
(0.1)
6.2
6.1
Net debt as at 31 December 2023
(326.5)
145.7
(180.8)
(49.0)
(229.8)
Financing cash flows
0.2
27.3
27.5
12.7
40.2
Acquired through business
combinations
–
–
–
–
–
Lease additions
–
–
–
(2.0)
(2.0)
Foreign exchange adjustments
15.0
(4.6)
10.4
1.6
12.0
Interest expense
(25.5)
–
(25.5)
(2.5)
(28.0)
Interest payment
25.5
–
25.5
2.5
28.0
Other
–
–
–
(5.8)
(5.8)
Net debt as at 31 December 2024
(311.3)
168.4
(142.9)
(42.5)
(185.4)
25. Related party transactions
Compensation for key management personnel is made up as follows:
2024
£m
2023
£m
Short-term employee benefits
4.1
1.9
Share-based payments
2.6
6.6
Pension
0.1
0.1
Total
6.8
8.6
Details of compensation for key management personnel are disclosed on pages 91 to 92.
Interest in S4S Ventures and Hoorah
The Group, through its subsidiary S4Capital 2 Limited a directly owned subsidiary, together
with Stanhope Capital LLP (Stanhope LLP), through its subsidiary Portman Square General
Partner S.à r.l. (Stanhope), subscribed for the initial €6,000 of shares each to incorporate
S4S Ventures General Partner S.à r.l. (GP), a Luxembourg company. The GP also controls
S4S Ventures General Partner LLC. The GP has since established two S4S Ventures funds
established in Luxembourg and the US.
During the year the Group invested in Hoorah Digital Proprietary Limited, a South African,
minority-owned, digital media business. See Note 14.
S4Capital Group did not have any other related party transactions during the financial year
(2023: £nil).
26. Contingent liabilities
Capital commitments
Capital commitments represents capital expenditure contracted for at the end of the
reporting period but not yet incurred at the period end. At 31 December 2024, S4Capital
Group has no capital commitments outstanding (2023: £nil).
27. Events occurring after the reporting period
The Revolving Credit Facility has been extended to a maturity date of February 2028 for
£80 million, with all four relationship banks extending on the same terms. The RCF remains
undrawn as at 31 December 2024. On the 23 March 2025 the Board proposed a final
dividend of 1p per share, amounting to £6.1 million, subject to shareowner approval. This will
be paid on 10 July 2025 to all shareowners on the register as at 6 June 2025. There were no
other material post balance sheet events, that require adjustment or disclosure, occurring
between the reporting period and the 23 March 2025.
Notes to the consolidated financial statements continued
S4Capital plc Annual Report and Accounts 2024
152
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
28. Interest in other entities
Subsidiaries
The Group’s subsidiaries at the end of the reporting period are set out below. Unless otherwise stated, they have share capital consisting solely of Ordinary Shares that are held directly by
the Group, and the proportion of ownership interests held equals the voting rights held by the Group. S4Capital 2 Limited has Ordinary Shares, 4,000 A2 incentive shares, 2,000 options
over A1 incentive shares as disclosed in Note 21. S4Capital plc directly holds effectively 100% of the ordinary shares in S4Capital 2 Limited. S4Capital plc indirectly holds effectively 100%
of the ordinary shares in the other entities.
Name of entity
Address of the registered office
Place of business/
Country of incorporation
Ownership
interest %
Principal activity
S4 Capital 2 Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Holding company
S4 Capital Acquisitions 1 Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Financing company
S4 Capital Acquisitions 2 Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Holding company
S4 Capital APAC Holdings Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Holding company
S4 Capital AUD Finance Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Financing company
S4 Capital Australia Holdings Pty Ltd
(Previously MEdiaMonks Australia
Holding Pty Ltd)
HWL Ebsworth Lawyers ‘Australia Square’ Level 14, 264–278 George
Street, Sydney, NSW 2000
Australia
100
Holding company
S4 Capital BRL Finance Limited
12 St. James’s Place, London, SW1A 1NX
United Kingdom
100
Financing company
S4 Capital CAD Finance Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Financing company
S4 Capital EMEA Holdings B.V.
Oude Amersfoortseweg 125, 1212 AA Hilversum
The Netherlands
100
Holding company
S4 Capital EUR Finance Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Financing company
S4 Capital France Holdings SAS
43–47 Avenue de la Grande Armée, 75116 Paris
France
100
Holding company
S4 Capital Germany Holdings GmbH
Zielstattstraße 40 c/o BDO AG, 81379, München
Germany
100
Holding company
S4 Capital Holdings Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Holding company
S4 Capital INR Finance Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Financing company
S4 Capital Investment Pte Ltd
19 Keppel Road, #02–08, Jit Poh Building, Singapore 089058
Singapore
100
Holding company
S4 Capital Italy Holdings Srl
Viale Abruzzi 94 CAP 20131 Milano
Italy
100
Holding company
S4 Capital LUX Finance S.àr.l.
2A Rue Nicolas Bové. L-1253 Luxembourg
Luxembourg
100
Financing company
S4 Capital Services Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Financing company
S4 Capital South America Holdings Limited 3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Holding company
S4 Capital UK Holdings Limited
3rd Floor, 44 Esplanade St Helier, JE4 9WG
Jersey
100
Holding company
S4 Capital US Holdings LLC
251 Little Falls Drive, Wilmington, DE 19808
United States of America
100
Holding company
4 Mile Analytics Pty Ltd
Suite 1003, Level 10, 28 Margaret St, Sydney, NSW, 2000
Australia
100
Data&Digital Media
Brightblue Consulting Limited
Media.Monks, Bonhill Building, 15 Bonhill Street, London,
England, EC2A 4DN
United Kingdom
100
Content
Brightblue Holdings Limited
Media.Monks, Bonhill Building, 15 Bonhill Street, London,
England, EC2A 4DN
United Kingdom
100
Holding company
Notes to the consolidated financial statements continued
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
28. Interest in other entities continued
Name of entity
Address of the registered office
Place of business/
Country of incorporation
Ownership
interest %
Principal activity
Cashmere Agency Inc.
850 New Burton Road, Suite 201, City of Dover, County of Kent,
Delaware 19904
United States of America
100
Content
Circus BA S.A.
Tucumán 1, 4th. Floor, City of Buenos Aires, C1049AAA
Argentina
100
Content
Circus Colombia S.A.S
Calle 95 15–09 Piso 3, Bogotá, D.C Codigo postal: 110221
Colombia
100
Content
Circus Marketing DF, S.A.P.I DE C.V
Avenida Amsterdam 271, Interior 203, Colonia Hipodromo,
Cuauhtemoc, 06100 Ciudad de Mexico, Mexico
Mexico
100
Content
Circus Network Holding, S.A.P.I. DE C.V.
Avenida Amsterdam 271, Interior 203, Colonia Hipodromo,
Cuauhtemoc, 06100 Ciudad de Mexico, Mexico
Mexico
100
Holding company
Citrusbyte, LLC (DBA TheoremOne, LLC)
21550 Oxnard St, 3rd Floor, #11 Woodland Hills, CA 91367
United States of America
100
Technology Services
Conversion Works Limited
Media.Monks, Bonhill Building, 15 Bonhill Street, London,
England, EC2A 4DN
United Kingdom
100
Data&Digital Media
Decoded Advanced Media LLC
800 North State Street, Suite 304, Dover, Kent County, Delaware 19901 United States of America
100
Content
Decoded Advertising LLC
800 North State Street, Suite 304, Dover, Kent County, Delaware 19901 United States of America
100
Content
Decoded US Holdco Inc
850 New Burton Road, Suite 201, Dover, Delaware, 19904
United States of America
100
Holding company
Destined 4 Pty Ltd
HWL Ebsworth Lawyers, Level 14, ‘Australia Square’, 264–278 George
Street, Sydney Cove NSW 2000
Australia
100
Data&Digital Media
Destined 5 Pte Ltd
30 Cecil Street, #19–08, Prudential Tower, Singapore (049712)
Singapore
100
Data&Digital Media
Digocloud SAS
Calle 95 15–09 Piso 3, Bogotá, D.C Codigo postal: 110221
Colombia
100
Data&Digital Media
Digodat SA
Tucumán 1, 4th. Floor, City of Buenos Aires C1049AAA
Argentina
100
Data&Digital Media
Digolab SPA
La Capitanía nro 80, Bloque Of Dpto, 108 Las Condes, Santiago
Chile
100
Data&Digital Media
Digosoft SRL de CV
Goldsmith 40, ofna 9, Colonia Polanco, Delegación Miguel Hidalgo,
Ciudad de México, CP 11550
Mexico
100
Data&Digital Media
Egypt.Monks for Distribution and
Production LLC
Cairo, Kasr El-Nil, South room of apartment no. 101 in building no. 13
Mohamed Ali Genah St., formerly Al-Bergas Street – Garden City,
Kasr El-Nil, Cairo.
Egypt
100
Content
Firewood Marketing Inc
850 New Burton Road, Suite 201, City of Dover, County of Kent,
Delaware 19904
United States of America
100
Content
Flying Nimbus SAS
Tucumán 1, 4th. Floor, City of Buenos Aires C1049AAA
Argentina
100
Data&Digital Media
Formula Consultants Inc.
2300 East Katella Avenue, Suite 355, Anaheim CA 92806
United States of America
100
Technology Services
Formula Partners, LLC
2140 S. Dupont Highway Camden, DE 19934
United States of America
100
Technology Services
Hilanders (Hong Kong) Limited
Room 303, 3/F, Golden Gate Commercial Building, 136–138 Austin
Road, Tsim Sha Tsui, Kowloon, Hong Kong
Hong Kong
100
Content
Lemma Solutions LLC
2140 S. Dupont Highway Camden, DE 19934
United States of America
100
Technology Services
Notes to the consolidated financial statements continued
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Notes to the consolidated financial statements continued
Lens10 Pty Ltd
‘Tower Three International Towers’ Level 16 300 Barangaroo Avenue,
Barangaroo NSW 2000
Australia
100
Data&Digital Media
Maverick Digital Inc
838 Walker Road, Suite 21–2, Dover, County of Kent, 19904, Delaware.
United States of America
100
Data&Digital Media
Maverick Digital Services Pvt Ltd
25/30, Third Floor, Babaji Complex, Tilak Nagar, Delhi 110018
India
100
Data&Digital Media
MediaMonks Canada Holdings Inc.
850 New Burton Road, Suite 201, Dover, Delaware, 19904
United States of America
100
Holding company
MEDIA.MONKS DUBLIN LIMITED
Block C, Magennis Pl, Pearse St, Dublin, D02 FK76, Ireland
Ireland
100
Content
Media.Monks DDM (Hilversum) B.V.
Oude Amersfoortseweg 125, 1212 AA Hilversum
The Netherlands
100
Data&Digital Media
Media.Monks Paris SAS
17 rue Martel – 75010 Paris
France
100
Content
Media.Monks Publishing B.V.
Oude Amersfoortseweg 125, 1212 AA Hilversum
The Netherlands
100
Content
Media.Monks Taiwan Co. Ltd
27F., No.9, Songgao Rd., Xinyi Dist., Taipei City 110, (R.O.C.)
Taiwan
100
Data&Digital Media
MediaMonks Arabian Company for Media
Production LLC
Bld 8087, Street Handalah Ibn Malik, Al wourud Dist., Riyadh, KSA
Postal code : 12253
Kingdom of Saudi Arabia
100
Content
MediaMonks Australia Pty Ltd
HWL Ebsworth Lawyers, Level 14, Australia Square, 264–278 George
Street, Sydney Cove NSW 2000
Australia
100
Content
MediaMonks B.V.
Oude Amersfoortseweg 125, 1212 AA Hilversum
The Netherlands
100
Content
MediaMonks Buenos Aires SRL
Tucumán 1, 4th Floor, Buenos Aires
Argentina
100
Content
MediaMonks Cape Town Pty Ltd
410 The Hills, Buchanan Square, 160 Sir Lowry Road, Woodstock 7925,
Cape Town
South Africa
100
Content
MediaMonks FZ-LLC
Dubai Media City Building 9, Third floor, unit 318, Dubai, U.A.E.
United Arab Emirates
100
Content
MediaMonks Germany GmbH
Münchner Freiheit 2, 80802 München
Germany
100
Content
MediaMonks Hong Kong Ltd
11/F, Unit B, Winbase Centre, 208 Queen’s Road Central Sheung Wang,
Hong Kong
Hong Kong
100
Holding company
MediaMonks Inc.
800 North State Street, Suite 304, Dover, Kent County, Delaware, 19901
United States of America
100
Content
MediaMonks Information Technology
(Shanghai) Co. Ltd.
Room 436, No. 1256, 1258 Wanrong Road, Jing’an District, Shanghai,
200040, China
P.R. China
100
Content
MediaMonks Kazakhstan LLP
6 Sary-Arka Avenue, premises 1, Sary-Arka district, Astana, 010000
Republic of Kazakhstan
100
Content
MediaMonks London Ltd
Media.Monks, Bonhill Building, 15 Bonhill Street, London,
England, EC2A 4DN
United Kingdom
100
Content
MediaMonks Madrid S.L.U
C/ Garcia Paredes No. 17, Interior Madrid 28010, Madrid
Spain
100
Content
MediaMonks Malaysia Sdn. Bhd.
No. 256B, Jalan Bandar 12, Taman Melawati, Wilayah Persekutuan,
Kuala Lumpur, 53100
Malaysia
100
Content
MediaMonks Mexico City S. de R.L. de C.V. Amsterdam 271 Int 203, Colonia Hipodromo, Delegación Cuauhtemoc,
CP 06100 CDMX
Mexico
100
Content
MediaMonks Milan S.R.L.
Milano (mi), Viale Papiniano 44, 20123, Italy
Italy
100
Content
28. Interest in other entities continued
Name of entity
Address of the registered office
Place of business/
Country of incorporation
Ownership
interest %
Principal activity
S4Capital plc Annual Report and Accounts 2024
155
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
MediaMonks Multimedia Holding B.V.
Oude Amersfoortseweg 125, 1212 AA Hilversum
The Netherlands
100
Holding company
MediaMonks Poland Spółka Z
Ograniczoną Odpowiedzialnością
ul. SZCZYTNICKA, nr 11, lok. miejsc. WROCŁAW, kod 50–382,
poczta WROCŁAW
Poland
100
Content
MediaMonks São Paulo Serviços de
Internet para Publicidade Ltda.
Rua Girassol, 106, 2o andar, Vila Madalena, São Paulo, SP,
CEP: 05433-000.
Brazil
100
Content
MediaMonks Seoul LLC
3F, Heung Guk BLDG, 166, Toegye-ro, Jung-gu, Seoul, 04627
Republic of Korea
100
Content
MediaMonks Services B.V.
Oude Amersfoortseweg 125, 1212 AA Hilversum
The Netherlands
100
Content
MediaMonks Singapore Pte. Ltd.
9 Raffles Place #26–01, Republic Plaza, Singapore 048619
Singapore
100
Content
MediaMonks Stockholm AB
Norrlandsgatan 18, 11143 Stockholm
Sweden
100
Content
MediaMonksTokyo G.K.
1-6-5 Jinnan, Shibuya Ku, Tokyo 150-0041
Japan
100
Content
MediaMonks Toronto Ulc
Suite 1700, Park Place, 666 Burrard Street, Vancouver, BC V6C 2X8
Canada
100
Content
Metric Theory LLC
850 New Burton Road, Suite 201, Dover, Delaware 19904
United States of America
100
Data&Digital Media
MightyHive AB
Norrlandsgatan 18, 111 43 Stockholm
Sweden
100
Data&Digital Media
MightyHive AU Pty Ltd
HWL Ebsworth Lawyers, Level 14, Australia Square, 264–278 George
Street, Sydney Cove NSW 2000
Australia
100
Data&Digital Media
MightyHive Brazil Consulting Ltda.
Rua Girassol, 106, 1 andar, Vila Madalena, São Paulo, SP,
CEP: 05433-000
Brazil
100
Data&Digital Media
MightyHive Germany GmbH
Münchner Freiheit 2, 80802 München
Germany
100
Data&Digital Media
MightyHive Holdings Ltd
Suite 1700, Park Place, 666 Burrard Street, Vancouver, BC V6C 2X8.
Canada
100
Data&Digital Media
MightyHive Hong Kong Limited
47/F Central Plaza, 18 Harbour Road, Wanchhai, Hong Kong
Hong Kong
100
Data&Digital Media
MightyHive Inc
850 New Burton Road, Suite 201, Dover, Delaware 19904
United States of America
100
Data&Digital Media
MightyHive India Private Ltd
Office No.5, 1st Floor, Harismruti CHSL, Opp. HDFC Bank, S.V.P Road,
Borivali (West), Mumbai, Maharashtra, India: 400092
India
100
Data&Digital Media
MightyHive Information Technology
(Shanghai) Co. Ltd
Room 07–130, Floor 08, No. 3, Lane 26, Qixia Road, China (Shanghai)
Pilot Free Trade, Zone (actual floor, 7th floor)
P. R. China
100
Data&Digital Media
MightyHive K.K.
6-12-18, Jingumae, Shibuya ku Tokyo, 150-0001, Japan
Japan
100
Data&Digital Media
MightyHive Korea Co. Ltd
3F 166 Toegye-ro, Jung-gu, Seoul, 04627
Republic of Korea
100
Data&Digital Media
MightyHive Ltd
The Pinnacle, 160 Midsummer Boulevard, Milton Keynes MK 9 1FF
United Kingdom
100
Data&Digital Media
MightyHive NZ Limited
William Buck (NZ) Ltd, Level 4, Zurich House, 21 Queen Street,
Auckland, 1010
New Zealand
100
Data&Digital Media
MightyHive SG Pte Ltd
50 Raffles Place, #29-01 Singapore Land Tower, Singapore 048623
Singapore
100
Data&Digital Media
MightyHive S.r.l.
Milano (MI) ViaLe Abruzzi 94 CAP 20131
Italy
100
Data&Digital Media
MIGHTYHIVE SAS
43–47 Avenue De La Grande Armee, 75116, Paris, France
France
100
Data&Digital Media
Notes to the consolidated financial statements continued
28. Interest in other entities continued
Name of entity
Address of the registered office
Place of business/
Country of incorporation
Ownership
interest %
Principal activity
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Sustainability Statement
Governance Report
Financial statements
M-Monks Digital Media Pvt. Ltd.
Flat No. 402, Paras Pearl, No. 161, Greenglen Layout, Sarjapur Outer
Ring Rd, Bellandur, Bangalore: 560037, Karnataka
India
100
Content
Monks Marketing (Thailand) Co., Ltd
Unit 3001-3014, 30th Floor, 689 Bhiraj Tower at EmQuartier, Soi 35,
Sukhumvit Road, Klongtan Nuea Sub-district, Bangkok, Wattana
District, 10110, Thailand
Thailand
100
Content
Progmedia Argentina SAS
Ortiz de Ocampo 3302 Building 1, 1st floor Office No. 7, City of
Buenos Aires
Argentina
100
Data&Digital Media
Proof LLC
21550 Oxnard St, 3rd Floor, #11 Woodland Hills, CA 91367
United States of America
100
Technology Services
PT Media Monks Indonesia
Equity Tower Building 35–37th floor, JL. JEND. SUDIRMAN, KAV
52–53, Desa/Kelurahan Senayan, Kec. Kebayoran Baru, Kota Adm.
Jakarta Selatan, Provinsi DKI Jakarta, Kode Pos: 12190
Indonesia
100
Content
Raccoon Publicidade Ltda.
Rua Dona Alexandrina, No. 1366, Vila Monteiro, Gleba I, São Carlos,
SP, CEP: 13.560-290
Brazil
100
Data&Digital Media
Rocky Publicidade Ltda.
Av. Irene da Silva Venâncio, 199, GP 03A, Bairro Protestantes,
Votorantim, SP, CEP: 18111-100
Brazil
100
Data&Digital Media
Technical Performance Services LLC
21550 Oxnard St, 3rd Floor, #11 Woodland Hills, CA 91367
United States of America
100
Technology Services
XX Artists LLC
12130 Millennium Dr., Suite 300, Los angeles, CA 90045
United States of America
100
Content
Zemoga SaS
Calle 95 15-09 Piso 4 y 5, Bogotá, D.C. Codigo postal: 110221
Colombia
100
Technology Services
Joint Ventures
Name of entity
Address of the registered office
Place of business/
Country of incorporation
Ownership
interest %
Principle activity
S4S Ventures General Partner S.À R.L.
412F, Route d’Esch L-1471, Luxembourg
Luxembourg
50
Holding company
S4S Ventures General Partner LLC
251 Little Falls Drive, Wilmington, DE 19808
United States of America
50
Holding company
Notes to the consolidated financial statements continued
28. Interest in other entities continued
Name of entity
Address of the registered office
Place of business/
Country of incorporation
Ownership
interest %
Principal activity
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Notes
2024
£m
2023
£m
Assets
Fixed assets
Investment in subsidiary
1
597.3
1,112.2
Right-of-use assets
2
0.3
–
597.6
1,112.2
Current assets
Trade and other receivables
3
3.3
9.3
Cash and cash equivalents
4
0.1
0.2
3.4
9.5
Total assets
601.0
1,121.7
Liabilities
Non-current liabilities
Lease liabilities
2
(0.2)
–
(0.2)
–
Current liabilities
Lease liabilities
2
(0.1)
–
Trade and other payables
5
(20.2)
(17.0)
(20.3)
(17.0)
Total liabilities
(20.5)
(17.0)
Net assets
580.5
1,104.7
Equity
Share capital
6
154.9
145.9
Reserves
6
425.6
958.8
Total equity
580.5
1,104.7
The Company reported a net loss for the financial year ended 31 December 2024 of
£529.0 million (2023: £2.9 million loss). The accompanying notes on pages 160 to 163 form
an integral part of the financial statements.
The financial statements on pages 158 to 163 were approved by the Board of Directors
on 23 March 2025 and signed on its behalf by
Sir Martin Sorrell
Mary Basterfield
Executive Chairman
Group Chief Financial Officer
Company’s registered number: 10476913
Company balance sheet
At 31 December 2024
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Share capital
£m
Share premium
£m
Other reserves
£m
Retained
earnings
£m
Total equity
£m
Balance at 1 January 2023
142.0
5.9
170.3
716.4
1,034.6
Loss for the year
–
–
–
(2.9)
(2.9)
Total comprehensive loss
–
–
–
(2.9)
(2.9)
Transactions with owners of the Company
Business combinations
3.9
74.5
(15.7)
–
62.7
Employee share schemes
–
–
0.6
9.7
10.3
Balance at 31 December 2023
145.9
80.4
155.2
723.2
1,104.7
Loss for the year
–
–
–
(529.0)
(529.0)
Total comprehensive loss
–
–
–
(529.0)
(529.0)
Transactions with owners of the Company
Business combinations
9.0
84.5
(94.9)
1.8
0.4
Employee share schemes
–
–
0.9
6.0
6.9
Treasury shares
–
–
(2.5)
–
(2.5)
Balance at 31 December 2024
154.9
164.9
58.7
202.0
580.5
The accompanying notes on pages 160 to 163 form an integral part of the Company financial statements.
Company statement of changes in equity
For the year ended 31 December 2024
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Financial statements
A. General
The Company financial statements are part of the 2024 financial statements of S4Capital
plc. S4Capital plc is a public Company, listed on the London Stock Exchange and has its
registered office at 12 St James’s Place, London, SW1A 1NX, United Kingdom. The new
UK Listing Rules, which came into force on 29 July 2024, have removed the distinction
between standard and premium listing categories, which are now categorised as equity
shares commercial companies (ESCC). As at the date of approval of the consolidated
financial statements, S4Capital plc is in the equity shares (transition) category.
S4Capital plc (the Company) is a holding company for investments active in the digital
advertising, marketing and technology services space.
B.
Basis of preparation
The Parent Company balance sheet and related notes have been prepared under the
historical cost convention and in accordance with Financial Reporting Standard 101
Reduced Disclosure Framework (FRS 101). The Parent Company financial statements
have been prepared in accordance with the requirements of the Companies Act 2006 and
The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008 (SI 2008/410).
In these financial statements, the Company has applied the exemptions available under
FRS 101 in respect of the following disclosures:
• Statement of cash flows and related notes;
• disclosures in respect of transactions with wholly owned subsidiaries;
• disclosures in respect of capital management;
• the effects of new but not yet effective IFRSs; and
• disclosures in respect of the compensation of Key Management Personnel.
As the Group consolidated financial statements (presented on pages 114 to 157) include
the equivalent disclosures, the Company has also taken the exemptions under FRS 101
available in respect of the following disclosures:
• IFRS 2 ‘Share-based Payments’ in respect of Group settled share-based payments
certain disclosures required by IFRS 13 ‘Fair Value Measurement’ and the disclosures
required by IFRS 7 ‘Financial Instrument Disclosures’.
• No individual profit or loss account is prepared as provided by Section 408 of the
Companies Act 2006.
C.
UK-adopted international accounting standards
The consolidated financial statements of S4Capital plc have 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.
D.
New and amended standards and interpretations adopted by
the Company
In the current year, the Company has applied a number of amendments to IFRS
Accounting Standards issued by the International Accounting Standards Board (IASB)
that are mandatorily effective for an accounting period that begins on or after 1 January
2024. Further detail can be found in the Group accounts on page 121. Their adoption
has not had any material impact on the disclosures or on the amounts reported in these
financial statements.
E.
New and amended standards and interpretations not yet adopted
Certain new and amended accounting standards and interpretations have been published
that are not mandatory for 31 December 2024 reporting periods and have not been early
adopted by the Company. None of these are expected to have a material impact on the
Company in the current or future reporting periods.
F.
Basis of accounting
The Company financial statements are prepared under the historical cost convention and
on a going concern basis, in accordance with the Companies Act 2006. The following
paragraphs describe the main accounting policies, which have been applied consistently.
The ability of the Company to continue as a going concern is contingent on the ongoing
viability of the Group. The Group meets its day-to-day working capital requirements
through its bank facilities. The Group’s forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the Group should be able to
operate within the level of its current facilities. Having assessed the principal risks and the
other matters discussed in connection with the viability statement, the Directors considered
it appropriate to adopt the going concern basis of accounting in preparing its consolidated
financial statements.
Estimates and judgements
The preparation of the Financial Statements in conformity with generally accepted
accounting principles requires management to make estimates and judgements that affect
the reported amounts of assets and liabilities at the date of the Financial Statements and
the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those judgements and estimates. The judgements and estimates that have
Notes to the Company financial statements
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Financial statements
F.
Basis of accounting continued
a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed overleaf.
Judgements
Impairment of investment in subsidiary
The Company applies judgement in determining whether the carrying value of the
Company’s investment in subsidiary have any indication of impairment at each reporting
period. Both external and internal factors are monitored for indicators of impairment.
When performing the impairment review, management’s approach is to determine whether
the recoverable amount exceeded the carrying amount of the investment in subsidiary.
Estimates
Impairment of investment in subsidiary
The carrying value of the Company’s investment in subsidiary have been disclosed in
Note 1 and is assessed for indicators of impairment at each reporting period. In testing
for impairment, management determines whether recoverable amount exceeds the cost
of investment recognised. The recoverable amount is assessed on a value in use basis.
The value in use is calculated using a discounted cash flow methodology using financial
information related to the subsidiaries including projected cash flows in conjunction with
the goodwill impairment analysis performed by the Group, as disclosed in Note 10 of the
consolidated financial statements. The Group’s value in use calculated for the goodwill
impairment has been adjusted downwards for the contractual cash flows relating to debt to
arrive at the investment in subsidiary’s value in use. These cashflows are then discounted at
the Group cost of equity discount rate.
Foreign currencies
Profit or loss account items in foreign currencies are translated into GBP at average
rates for the relevant accounting periods. Monetary assets and liabilities are translated at
exchange rates prevailing at the date of the Company balance sheet. Exchange gains and
losses on loans and on short-term foreign currency borrowings and deposits are included
within net finance cost. Exchange differences on all other foreign currency transactions are
recognised in operating profit.
Taxation
The current tax payable is based on taxable profit for the year. Taxable profit differs from
reported profit because taxable profit excludes items that are either never taxable or tax
deductible or items that are taxable or tax deductible in a different period. The Company’s
current tax assets and liabilities are calculated using tax rates that have been enacted or
substantively enacted by the reporting date.
Deferred tax is provided using the balance sheet liability method, providing for temporary
differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax assets are recognised
to the extent that it is probable that taxable profit will be available against which the asset
can be utilised. This requires judgements to be made in respect of the availability of future
taxable income.
No deferred tax asset or liability is recognised in respect of temporary differences
associated with investments in subsidiaries and branches where the Company is able
to control the timing of reversal of the temporary differences and it is probable that the
temporary differences will not reverse in the foreseeable future.
The Company’s deferred tax assets and liabilities are calculated using tax rates that are
expected to apply in the period when the liability is settled or the asset realised based on
tax rates that have been enacted or substantively enacted by the reporting date.
Accruals for tax contingencies require management to make judgements of potential
exposures in relation to tax audit issues. Tax benefits are not recognised unless the tax
positions will probably be accepted by the authorities. This is based upon management’s
interpretation of applicable laws and regulations and the expectation of how the tax
authority will resolve the matter. Once considered probable of not being accepted,
management reviews each material tax benefit and reflects the effect of the uncertainty
in determining the related taxable result.
Accruals for tax contingencies are measured using either the most likely amount or the
expected value amount depending on which method the Company expect to better predict
the resolution of the uncertainty.
Investments
Fixed asset investments, including investments in subsidiaries, are stated at cost
and reviewed for impairment if there are indications that the carrying value may not
be recoverable.
Share-based payments
The issuance by the Company to employees of its subsidiaries of a grant of awards over
the Company’s shares, represents additional capital contributions by the Company to its
subsidiaries. An additional investment in subsidiaries results in a corresponding increase
in shareholders’ equity. The additional capital contribution is based on the fair value of the
grant issued, allocated over the underlying grant’s vesting period, less the market cost of
shares charged to subsidiaries in settlement of such share awards.
Notes to the Company financial statements continued
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Financial statements
F.
Basis of accounting continued
Litigation
Through the normal course of business, the Group is involved in legal disputes the
settlement of which may involve cost to the Company. Provision is made where an adverse
outcome is probable and associated costs can be estimated reliably. In other cases,
appropriate descriptions are included.
Dividends
Up to the date of approval of these financial statements no dividends were paid by
S4Capital plc to its shareowners (2023: £nil).
Employees
The Company had no employees during either year. Details of Directors’ emoluments,
which were paid by other Group companies, are set out in the Directors’ Remuneration
Report on pages 91 to 92.
1.
Investment in subsidiary
Investment in subsidiary is stated at cost less, where appropriate, provisions for impairment.
2024
£m
2023
£m
Balance at the beginning of the year
1,112.2
1,039.5
Capital contributions
0.9
62.4
Impairment of investment
(522.7)
–
Share-based payments
6.9
10.3
Balance at the end of the year
597.3
1,112.2
The Company directly holds 100% ownership in S4Capital 2 Limited. The Company
indirectly holds effectively 100% of Ordinary Shares of the subsidiaries disclosed in Note
28 of the consolidated financial statements. The investment in subsidiary is assessed to
determine if there is any indication that the investment might be impaired.
The Group has performed its annual goodwill impairment test, as disclosed in Note 10,
which resulted in an impairment. As a result, management performed an impairment
test to determine whether the recoverable amount of the Company exceeded the cost of
investment recognised. This resulted in an impairment of £522.7 million (2023: £nil) in the
investment held by the Company as at 30 September 2024.
The recoverable amount was assessed on a value-in-use basis. The value-in-use is
calculated using a discounted cash flow methodology using financial information related to
the subsidiaries including projected cash flows in conjunction with the goodwill impairment
analysis performed by the Group, as disclosed in Note 10 of the consolidated financial
statements. The value of the investment in subsidiary of the Company of £1,118.3 million
was lower than the combined carrying amount of the CGU’s tested for impairment in Note
10. The Group’s value-in-use calculated for the goodwill impairment has been adjusted
downwards for the contractual cash flows relating to debt to arrive at the investment in
subsidiary’s value in use and using the Group’s discount rate. The resultant value-in-use
is below the carrying value of the investment in subsidiary, resulting in impairment.
The following is a sensitivity analysis for impairment losses recognised in the Company’s
investment in subsidiary, in the case of changes in the key assumptions. The consequential
impacts of the changes in net revenue growth and EBITDA margins on cash flow assumptions
including working capital movements and tax charges have been incorporated into the
sensitivity analyses set out below, but all other variables are held constant.
Net revenue growth
20% movement1
£m
EBITDA margin
100bps movement2
£m
Net impairment movement under sensitivity
35.3
53.7
Notes:
1. A 20% movement has been applied to net revenue growth rate in each year of the explicit forecast period, with the
long-term growth rate unchanged.
2. A 100 basis point movement in EBITDA margin has been applied in each year of the forecast period, including in the
terminal period.
2.
Leases
Right-of-use assets
2024
£m
2023
£m
Balance at 1 January
–
–
Additions
0.4
–
Depreciation of right-of-use assets
(0.1)
–
Balance at 31 December
0.3
–
Lease liabilities
2024
£m
2023
£m
Balance at 1 January
–
–
Additions
(0.4)
–
Payment of lease liabilities
0.1
–
Balance at 31 December
(0.3)
–
Non-current lease liabilities
(0.2)
–
Current lease liabilities
(0.1)
–
Balance at 31 December
(0.3)
–
Notes to the Company financial statements continued
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3.
Trade and other receivables
2024
£m
2023
£m
Value added tax
0.2
0.7
Corporate tax
–
4.4
Amounts owed by subsidiaries
2.1
3.0
Other receivables and prepayments
1.0
1.2
Total
3.3
9.3
The loss allowance for receivables from subsidiaries is based on the three-stage impairment
expected credit loss model. No material impairment arose.
4.
Cash and cash equivalents
2024
£m
2023
£m
Cash and cash equivalents
0.1
0.2
Total
0.1
0.2
5.
Trade and other payables
2024
£m
2023
£m
Trade payables
(0.1)
(1.3)
Other payables and accruals
(2.4)
(3.0)
Value added taxes
–
–
Amounts owed to subsidiaries
(17.7)
(12.7)
Total
(20.2)
(17.0)
6.
Equity
A.
Share capital
The authorised share capital of S4Capital plc contain an unlimited number of Ordinary
Shares having a nominal value of £0.25 per Ordinary Share. At the end of the reporting
period, the issued and paid-up share capital of the Company consisted of 619,636,656
(2023: 583,064,256) Ordinary Shares having a nominal value of £0.25 per Ordinary Share.
Notes to the Company financial statements continued
B.
Reserves
The following describes the nature and purpose of each reserve within equity:
Share premium
Amount subscribed for share capital in excess of nominal value.
The share premium is net of costs directly relating to the issuance
of shares.
Merger reserves
Amount subscribed for share capital in excess of nominal value as
required by merger relief.
Other reserves
Shares issued in the name of the Company to an employee
benefit trust and shares issued in the name of S4Capital Group
for deferred consideration.
Retained earnings
Retained earnings represents the net profit/(loss) for the year and
all other net gains and losses and transactions with shareowners
(example dividends) not recognised elsewhere.
7.
Related party transactions
Details of compensation for key management personnel are disclosed on page 152.
During the year the Group invested in Hoorah Digital Proprietary Limited, a South
African, minority-owned, digital media business. See Note 14 of the consolidated
financial statements.
The Company did not have any other related party transactions during the financial year
(2023: £nil).
8.
Events occurring after the reporting period
Details of events occurring after the reporting period are disclosed in Note 27 of the
consolidated financial statements.
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Financial statements
The Group has included various unaudited alternative performance measures (APMs) in its Annual Report and Accounts. The Group includes these non-GAAP measures as it considers
these measures to be both useful and necessary to the readers of the Annual Report and Accounts 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, 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.
APM
Closest IFRS measure
Adjustments to reconcile to IFRS measure
Reason for use
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 on page 165)
It is an important measure to help understand the scale of the activities that
the 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 on page 165)
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 on page 165)
This is more closely aligned to the fees the Group earns for its services
provided to the clients. This is a key metric used in business 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 asset depreciation (see reconciliation A3 on page 165)
Operational EBITDA is operating profit 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 2023, restated to include
acquired businesses for the same months as 2024, and restated
using same FX rates as used in 2024 (see reconciliations A4 on
page 166)
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 period.
Pro-forma
Revenue and
operating profit
Is full year consolidated results in constant currency and for
acquisitions as if the Group had existed in full for the year (see
reconciliations A5 on page 166)
Pro-forma figures are used extensively by management and the investment
community. It is a useful measure when looking at how the Group has
changed in light of the number of acquisitions that have been completed and
to understand the performance of the Group.
Adjusted basic
earnings
Basic earnings
per share
Excludes amortisation of intangible assets, acquisition related costs,
share-based payments and restructuring and other one-off expenses
(see reconciliation A6 on page 167)
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.
Appendix: Alternative Performance Measures
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Financial statements
APM
Closest IFRS measure
Adjustments to reconcile to IFRS measure
Reason for use
Consolidated statement of profit or loss continued
Adjusted
profit for the
year
(Loss)/profit
for the year
Excludes amortisation of intangible assets, acquisition related
expenses, share-based payments and restructuring and other
one-off expenses (see reconciliation A6 on page 167)
Adjusted profit for the year is used by management to understand the
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 measure used by management and in
calculations for bank covenants (see reconciliation A7 on page 168)
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
Cash flow from operating activities adjusted for purchase of
intangibles and property, plant and equipment, lease liabilities,
interest and facility fees paid, security deposits and employment
linked contingent consideration paid (see reconciliation A8 on
page 168)
Free cash flow is a commonly used metric used to identify the amount of cash
at the disposal of the Group.
Appendix: Alternative Performance Measures continued
Billings and controlled billings (A1)
2024
£m
2023
£m
Revenue
848.2
1,011.5
Pass-through expenses
1,114.8
859.0
Billings1
1,963.0
1,870.5
Third party billings direct to clients
3,254.6
3,152.3
Controlled billings2
5,217.6
5,022.8
Notes:
1. Billings are gross billings to clients including pass-through expenses.
2. Controlled billings are billings we influenced.
Net revenue (A2)
2024
£m
2023
£m
Revenue
848.2
1,011.5
Direct costs
(93.6)
(138.3)
Net revenue
754.6
873.2
Reconciliation to operational EBITDA (A3)
2024
£m
2023
£m
Operating (loss)/profit
(302.8)
20.2
Amortisation of intangible assets
44.3
48.6
Impairment of intangible assets
301.2
–
Acquisition expenses
(1.3)
(9.2)
Share-based payments
6.5
10.1
Restructuring and other one-off expenses1
30.4
11.8
Depreciation of property, plant and equipment2
9.5
12.2
Operational EBITDA
87.8
93.7
Notes:
1. Restructuring and other one-off expenses relate to restructuring costs of £18.8 million (2023: £18.2 million),
transformation costs of £4.2 million (2023: £2.9 million), impairment of right-of-use assets of £5.3 million
(2023: £nil), onerous lease provisions of £2.1 million (2023: £nil), offset by £nil due to the significant devaluation of
the Argentinian Peso (2023: £9.3 million).
2. Depreciation of property, plant and equipment is exclusive of depreciation on right-of-use assets and includes £nil
(2023: £0.5 million expense) relating to the significant devaluation of Argentinian Peso.
S4Capital plc Annual Report and Accounts 2024
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Financial statements
Like-for-Like (A4)
Like-for-like revenue
Year ended 31 December 2023
Content
£m
Data&Digital
Media
£m
Technology
Services
£m
Total
£m
Revenue
664.1
210.4
137.0
1,011.5
Impact of acquisitions
–
–
1.1
1.1
Impact of foreign exchange
(19.5)
(7.7)
(3.9)
(31.1)
Like-for-like revenue1
644.6
202.7
134.2
981.5
% like-for-like revenue change
(12.1%)
(3.8%)
(35.5%)
(13.6%)
Note:
1. Like-for-like is a non-GAAP measure and relates to 2023 being restated to show the audited numbers for
the previous year of the existing and acquired businesses consolidated for the same months as in 2024,
applying currency rates as used in 2024.
Like-for-like net revenue
Year ended 31 December 2023
Content
£m
Data&Digital
Media
£m
Technology
Services
£m
Total
£m
Net revenue
528.9
207.3
137.0
873.2
Impact of acquisitions
–
–
1.1
1.1
Impact of foreign exchange
(15.3)
(7.6)
(4.0)
(26.9)
Like-for-like net revenue1
513.6
199.7
134.1
847.4
% like-for-like net revenue change
(7.4%)
(3.7%)
(35.3%)
(11.0%)
Note:
1. Like-for-like is a non-GAAP measure and relates to 2023 being restated to show the audited numbers for
the previous year of the existing and acquired businesses consolidated for the same months as in 2024,
applying currency rates as used in 2024.
Like-for-like operational EBITDA
Year ended 31 December 2023
Total
£m
Operational EBITDA
93.7
Impact of acquisitions
(0.2)
Impact of foreign exchange
(5.2)
Like-for-like operational EBITDA1
88.3
% like-for-like operational EBITDA change
(0.6%)
Note:
1. Like-for-like is a non-GAAP measure and relates to 2023 being restated to show the audited numbers for the
previous year of the existing and acquired businesses consolidated for the same months as in 2024, applying
currency rates as used in 2024.
Pro-forma (A5)
Pro-forma revenue
Content
£m
Data&Digital
Media
£m
Technology
Services
£m
Total
£m
FY24 revenue
566.7
195.0
86.5
848.2
Impact of acquisitions
–
–
–
–
FY24 pro-forma revenue1
566.7
195.0
86.5
848.2
FY23 revenue
664.1
210.4
137.0
1,011.5
Impact of acquisitions
–
–
1.1
1.1
Impact of foreign exchange
(19.5)
(7.7)
(3.9)
(31.1)
FY23 pro-forma revenue1
644.6
202.7
134.2
981.5
% pro-forma revenue change
(12.1%)
(3.8%)
(35.5%)
(13.6%)
Note:
1. Pro-forma relates to audited full year non-statutory and non-GAAP consolidated results in constant currency as if
the Group had existed in full for the year and have been prepared under comparable GAAP with no consolidation
eliminations in the pre-acquisition period.
Appendix: Alternative Performance Measures continued
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Pro-forma (A5) continued
Pro-forma net revenue
Content
£m
Data&Digital
Media
£m
Technology
Services
£m
Total
£m
FY24 net revenue
475.5
192.4
86.7
754.6
Impact of acquisitions
–
–
–
–
FY24 pro-forma net revenue1
475.5
192.4
86.7
754.6
FY23 net revenue
528.9
207.3
137.0
873.2
Impact of acquisitions
–
–
1.1
1.1
Impact of foreign exchange
(15.3)
(7.6)
(4.0)
(26.9)
FY23 pro-forma net revenue1
513.6
199.7
134.1
847.4
% pro-forma net revenue change
(7.4%)
(3.7%)
(35.3%)
(11.0%)
Note:
1. Pro-forma relates to audited full year non-statutory and non-GAAP consolidated results in constant currency as if
the Group had existed in full for the year and have been prepared under comparable GAAP with no consolidation
eliminations in the pre-acquisition period.
Pro-forma operational EBITDA
Total
£m
FY24 operational EBITDA
87.8
Impact of acquisitions
–
FY24 pro-forma operational EBITDA1
87.8
FY23 operational EBITDA
93.7
Impact of acquisitions
(0.2)
Impact of foreign exchange
(5.2)
FY23 pro-forma operational EBITDA1
88.3
% pro-forma Operational EBITDA change
(0.6%)
Note:
1. Pro-forma relates to audited full year non-statutory and non-GAAP consolidated results in constant currency as if
the Group had existed in full for the year and have been prepared under comparable GAAP with no consolidation
eliminations in the pre-acquisition period.
Appendix: Alternative Performance Measures continued
Adjusted basic earnings per share (A6)
Year ending 31 December 2024
Reported
£m
Amortisation1
£m
Impairment of
intangibles
£m
Acquisition
expenses2
£m
Share-based
payments
£m
Restructuring
and other
one-off
expenses3
£m
Adjusted
£m
Operating (loss)/profit
(302.8)
44.3
301.2
(1.3)
6.5
30.4
78.3
Net finance expenses
(26.4)
–
–
–
–
–
(26.4)
Loss on the net monetary position
(1.7)
–
–
–
–
–
(1.7)
(Loss)/profit before income tax
(330.9)
44.3
301.2
(1.3)
6.5
30.4
50.2
Income tax credit/(expense)
24.0
(12.0)
(20.8)
–
(0.8)
(5.9)
(15.5)
(Loss)/profit for the year
(306.9)
32.3
280.4
(1.3)
5.7
24.5
34.7
Notes:
1. Amortisation relates to the intangible assets recognised as a result of the acquisitions (see Note 6).
2. Acquisition expenses relate to acquisition related advisory fees of £1.0 million, contingent consideration as remuneration of £0.7 million and remeasurement gain on contingent considerations of £3.0 million.
3. Restructuring and other one-off expenses relate to restructuring costs of £18.8 million, transformation costs of £4.2 million, impairment of right-of-use assets of £5.3 million, onerous lease provisions of £2.1 million, offset by £nil due to the
significant devaluation of the Argentinian Peso.
S4Capital plc Annual Report and Accounts 2024
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Strategic Report
Sustainability Statement
Governance Report
Financial statements
Adjusted basic earnings per share (A6) continued
Year ending
31 December 2023
Reported
£m
Amortisation
and
impairment1
£m
Acquisition
expenses2
£m
Share-
based
payments
£m
Restructuring
and other
one-off
expenses3
£m
Adjusted
£m
Operating profit
20.2
48.6
(9.2)
10.1
12.3
82.0
Net finance expenses
(35.4)
–
–
–
1.5
(33.9)
Gain/(loss) on net
monetary position
1.3
–
–
–
(1.3)
–
(Loss)/profit before
income tax
(13.9)
48.6
(9.2)
10.1
12.5
48.1
Income tax expense4
(0.4)
(14.7)
–
(0.7)
(4.1)
(19.9)
(Loss)/profit for
the year4
(14.3)
33.9
(9.2)
9.4
8.4
28.2
Notes:
1. Amortisation and impairment relates to the intangible assets recognised as a result of the acquisitions (see Note 6).
2. Acquisition expenses relate to acquisition related advisory fees of £2.3 million, contingent consideration as
remuneration of £13.2 million and remeasurement gain on contingent considerations of £24.7 million.
3. Restructuring and other one-off expenses relate to restructuring costs of £18.2 million, transformation costs of
£2.9 million, offset by £8.8 million due to the significant devaluation of the Argentinian Peso.
4. The comparatives for the year ended 31 December 2023 have been restated to account for the recognition of
deferred tax balances related to certain business combinations in the prior years (see Note 2).
Adjusted basic result per share
2024
20231
Adjusted profit attributable to owners of the Company (£m)
34.7
28.2
Weighted average number of Ordinary Shares for the
purpose of basic EPS (shares)
671,956,509
639,218,703
Adjusted basic earnings per share (pence)
5.2
4.4
Note:
1. The comparatives for the year ended 31 December 2023 have been restated to account for the recognition of
deferred tax balances related to certain business combinations in the prior years (see Note 2).
Net debt (A7)
Net debt
2024
£m
2023
£m
Cash and bank
168.4
145.7
Loans and borrowings
(311.3)
(326.5)
Net debt
(142.9)
(180.8)
Lease liabilities
(42.5)
(49.0)
Net debt including lease liabilities
(185.4)
(229.8)
Free cash flow (A8)
Free cash flow
2024
£m
2023
£m
Net cash inflow/(outflow) from operating activities
84.1
(10.7)
Employment linked contingent consideration paid
2.9
77.7
Interest and facility fees paid
(29.1)
(26.7)
Interest received
2.1
–
Purchase of intangible assets
(4.2)
(2.1)
Purchase of property, plant and equipment
(4.0)
(5.9)
Security deposits
0.5
(2.2)
Principal element of lease payments
(12.7)
(16.3)
Other non-cash items
(1.8)
–
Free cash flow
37.8
13.8
Appendix: Alternative Performance Measures continued
S4Capital plc Annual Report and Accounts 2024
168
Our business
Strategic Report
Sustainability Statement
Governance Report
Financial statements
Shareowner information
Advisers and registrars
Principal bankers
HSBC Bank Plc
Joint brokers
Dowgate Capital Limited
Morgan Stanley & Co
Jefferies International Limited
Independent auditors
PricewaterhouseCoopers LLP
Solicitor
Travers Smith LLP
Communications adviser
Sodali & Co
Registrars
Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
01252 821390
enquiries@shareregistrars.uk.com
Group Company Secretary
Caroline Kowall
ISIN
GB00BFZZM640
Ticker
SFOR
Registered office
12 St James’s Place
London
SW1A 1NX
Website
www.s4capital.com
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Strategic Report
Sustainability Statement
Governance Report
Financial statements