S4 Capital plc (LON: SFOR), the technology-driven new age/new era digital marketing and advertising services company, announced Wednesday a merger between 4 Mile Analytics and Media.Monks, which significantly expands the capabilities of its Data&digital media practice.
The merger increases S4 Capital global analysis capabilities and broadens its customer base. 4 Mile Analytics is a leader in data analytics, data engineering, data governance, software engineering, UX design, and project and product management.
With around 50 data scientists, 4 Mile Analytics generated approximately $6.5 million in revenue in 2021 and aims to double this year.
Management Commentary
Sir Martin Sorrell, S4 Capital executive chairman said, “Understanding and acting on data is at the heart of the S4Capital Content, Digital Media and Technology services offering. Therefore, we are delighted to welcome Nick, Sam and their colleagues at 4 Mile Analytics, as we expand our capabilities and partnerships, in particular with Google and their Looker and Google Cloud platforms.”
Trading Update
S4Capital confirmed that trading in the first 11 months and its forecast for December continues in line with market expectations, generating very high comparable store sales and gross profit/net sales growth well above the company’s latest forecast of 40%.
EBITDA operating margins improved considerably in the second half of the year, as shown in the September half-year report and the November third-quarter press release.
Even after factoring in the cash consideration paid from recently completed mergers, including 4 Mile Analytics, the company has monthly net debt of between £10 million and £30 million, reflecting strong operating cash flow.
Fiscal 2021 results will be announced on March 18, 2022.
Wall Street’s Take
On January 12, Morgan Stanley analyst Patrick Wellington kept a Buy rating on SFOR and 1,050p price target. This implies 90.6% upside potential.
Overall, SFOR scores a Strong Buy consensus rating among analysts based on three Buys and one Hold. The average S4 Capital Plc price target of 907.50p implies 64.7% upside potential to current levels.
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