S4 Capital downgrades sales outlook as tariff woes hamper economic outlook
Sir Martin Sorrell's marketing firm S4 Capital has warned that annual revenues are set to fall amid customer caution as US tariff hikes cause global economic uncertainty.
The group said like-for-like net revenues are expected to drop by low single percentage digits over the full year.
It had previously guided for revenues to remain largely flat on the year before.
The group flagged 'wider market uncertainty and significant volatility in global economic policy, particularly as a result of the US-imposed tariffs'.
But S4 Capital said it still expects underlying earnings to be 'broadly' similar to 2024, helping shares lift 6% in morning trading on Wednesday.
Sir Martin, executive chairman of S4 Capital and previous boss of marketing giant WPP, said: 'The global macroeconomic environment has become even more challenging in 2025.
'Assessing the impact of US-imposed tariffs has been added to the three key risks around US/ China relations, Russia / Ukraine and Iran /Middle-East.
'Clients, therefore, are likely to remain cautious.'
He said the group would 'continue to focus on our cost base and will take further action to support profitability, if necessary'.
'We expect an improved performance in the second half of the year and a greater second half weighting than in the prior year, enhanced by the phasing of new business revenue, including wins already secured,' he added.
The firm last month reported an 11.4% plunge in pro forma net revenues in the three months to March 31 and warned over ongoing cutbacks in tech spend.
S4 Capital has cut its workforce by 8% to around 7,000, down from about 7,600 a year ago, as it looks to rein in costs in the face of more challenging trading.
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