S4 Capital (SFOR) H1 2026 earnings summary

Executive summary

• Net revenue for H1 2026 was GBP 308 million, down 6.2% reported and 4.7% like-for-like, reflecting macroeconomic volatility and client caution, especially among technology clients prioritizing AI investments.

• Operational EBITDA rose to GBP 38 million, up 83% reported and 128% like-for-like, with margin at 12.3%, driven by disciplined cost management and headcount reductions.

• The board approved an inaugural interim dividend of GBP 0.0135 per share, representing 50% of adjusted basic EPS.

• Net debt reduced to GBP 66.3 million, with leverage at 0.7x operational EBITDA, well below targets.

• Significant new business wins include LVMH, Mercado Libre, Capital One, Revlon, Square, Seek, Watts, and Air India.

Financial highlights

• Revenue for H1 2026 was GBP 344 million, down 4.6% reported and 3.2% like-for-like.

• Adjusted operating profit reached GBP 35.2 million; adjusted basic EPS was GBP 0.027, up from GBP 0.002 in H1 2025.

• Free cash flow was GBP 10.4 million, down from GBP 16 million in H1 2025, due to working capital outflows.

• Personnel and operating expenses reduced by 12.6% reported; headcount down 11% year-over-year.

• Capital expenditure increased to GBP 2.7 million, reflecting ongoing AI investments.

Outlook and guidance

• Full-year 2026 like-for-like net revenue expected to decline mid-single digits.

• Operational EBITDA guidance maintained at GBP 85 million, with margin targeted to rise by 140 basis points.

• Year-end net debt range lowered to GBP 50 million–GBP 80 million; leverage to remain under 1x.

• Adjusted basic EPS forecast to exceed analyst consensus; effective tax rate expected at 28%-30%.

• Dividend payout policy set at 50% of adjusted basic EPS, with final dividend for 2026 planned.