Sir Martin Sorrell’s company acquired five marketing agencies last year and has snapped up four more since.Photo: Aaron Chown/PA via Getty
Here are some of the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.
Cineworld shares slump
Cineworld (CINE.L) shares plummeted as much as 12% on Thursday after the company revealed a worse-than-expected $ 3bn (£2.2bn) annual loss, compared to a profit of $ 155.2m in 2019, as the pandemic forced it to close its screens.
Revenues at the cinema chain fell 80% from $ 4.3bn pre-pandemic to $ 852m last year.
The company, which operates more than 600 movie theatres including the Odeon chain in the UK, said it was hopeful of “strong pent-up demand” from cinema-goers once its theatres open in the US from April 2, in the UK from May 17, and the rest of the world.
It added that it had secured commitments for a new $ 213m convertible bond to safeguard itself from a further hit due to the ongoing crisis.
Cineworld shares fell sharply lower on Thursday. Chart: Yahoo Finance
“I never imagined a time that we would see the closure of our entire cinema estate,” said Mooky Greidinger, chief executive of Cineworld.
“Nor that varying restrictions would remain in place for so long as we continue to navigate our way through the crisis.”
Earlier this week, Cineworld announced that it had secured a deal with Warner Bros, starting in 2022, which will give it limited exclusivity for 45 days in the US and 31 days in the UK.
Harry Barnick, senior analyst at Third Bridge, said: “The novelty factor of so many leisure and shopping activities opening again is going to mean a prolonged fight for consumer attention. This will play out against a backdrop of multiple movies being released in quick succession and some of the public retaining an aversion to confined spaces.”
“For cinemas, it looks like a slow-mo recovery featuring a lot of single-site closures and further consolidation.”
READ MORE: Cineworld to reopen cinemas in the US and UK
Profit at S4 Capital soars
Profit at sir Martin Sorrell’s S4 Capital (SFOR.L) jumped by a fifth last year as it continues to expansion strategy.
The digital advertising group, which has major contracts with Google (GOOG) and BMW/MINI, posted a 19.4% rise in gross profit to £295m in 2020, while revenue rose 15% to £343m.
The company has also forecasted like-for-like gross profit growth of 25% this year. Billings rose 43.4% on a reported level, and 19.6% on a like-for-like level to £653.4m.
“The pandemic has accelerated adoption of digital transformation amongst consumers, across all media and within enterprises and, in turn, stimulated the demand from clients for digital marketing expertise,” Sorrell said.
“We believe 2021 and 2022 will be very strong years economically, as the world rebounds from the pandemic and spends and invests the huge pandemic-driven fiscal and monetary stimulus.”
READ MORE: Advertising tycoon Martin Sorrell predicts ‘permanent’ digital shift
The company acquired five marketing agencies last year and has snapped up four more since.
In January S4 Capital revealed two new deals in an attempt to accelerate international expansion post-Brexit.
It said agencies Decoded Advertising and Metric Theory would merge with two of its existing companies. The firm is also targeting expansion in the Americas, Asia-Pacific, Africa and the Middle-East.
European stock markets took their cue from Asia on opening, starting Thursday morning in the red, ahead of the European vaccines summit.
The FTSE 100 (^FTSE) fell 0.2% after opening, while the CAC (^FCHI) tumbled 0.41% and the DAX (^GDAXI) was 0.27% lower.
The European Union (EU) will decide on whether to ban vaccine exports at a two-day video-conference starting today.
According to a draft final summit statement seen by Reuters, the 27 EU members will also discuss how to speed up vaccinations across the bloc, as well as industrial policy and relations with Turkey and Russia.
Michael Hewson, chief market analyst at CMC Markets UK, said: “Tensions between the EU and UK still remain fairly elevated, despite efforts to cool the narrative, while the recent comments from Thierry Breton, the EU’s internal market commissioner, accusing the UK of vaccine nationalism still suggest the potential for a misstep, as feelings continue to run high, particularly on the EU side, where the sense of grievance remains especially elevated.”
WATCH: EU ban on vaccine exports will harm bloc’s reputation, minister warns