4 Mile Analytic, Media.Monks to Merge

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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