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Added - let's see the bid coming now.
I didn't buy heavily - nibbled some at 43.65. A drawdown at the open, but we'll see how it trend during the day.
Medium term, the business trajectory is positive as the macro improves for agencies and the sellside's 6x vluation based on 2025 earnings projection may well be off the mark if (when) the macro turns even a bit.
Bought heavily at 43p...thank you sellers
“#SFOR Jefferies early note "S4's 2025 fwd PE
(6x)sits at a 40% discount to peers (c.10x).
Reiterate Buy." As @WSJ says "Sorrell was the Ad industry's hunter and is about to become its prey." Perfect morsel and geographic fit for @stagwell which offered $700m. #STGW sp strong”
Margins will get better as the year progresses, on a lower cost base. I'd certainly think that Q1 is the low point for net revenues and will start to trend upwards as the year progresses. Better H2 comparables beckon and the market looks forward and not backwards. With an improving rate outlook, even in the US, I'm quietly confident that revenues/EBITDA margins will rebound as we progress throuhg the year.
I'm a buyer if there are washdowns!!
As expected, what is very interesting is..We are delighted to announce that Justin Billingsley has joined Media.Monks as Chief Growth Officer .. no-one can say they do no the talent.. a very top level appointment .
Underneath the jam
continuing macro-economic uncertainty and resultant client caution, particularly amongst technology clients, have continued in Q1 2024, along with the expected lower activity in some of our larger Technology Services clients.
As well as margins is no one concerned about client retention?
As Martin said last year
Sorrell on S4: 'The train set we have is sufficient; we just have to run it better'
Buy the dips forever !
Mx
Plenty of Sir Martin's usual Doom and Gloom for the markets to exploit. Maybe SMS started shorting this a year ago...?
Impossible to know how the market will react but core business is sound and will pick up once macro turns. US is the biggest market and it is an election year so H2 will hopefully be better than the very cautious tone presented here.
Remains IMO a gift under 50p per share, so agree is a buying op if there is a drop. Atb and imo.
A bit of head count reduction as well at 7598 employees now (down 110 from end of December). Content margins are trending better than last year and for now, they're still calling for EBITDA levels to be same as LFY, and that points to a sequential increase in EBITDA margin %. Tech consulting is still challenged and I won't be surprised if the cost (employee) cuts are mostly focused in that practice. GBP was a bit stronger vs USD over Q1 2023 and that was cited as a reason for lower revenues, maybe a 3 to 4% impact? A bit weak on the revenue front, but the EBITDA margins are not being knocked down and there's nothing shocking in the Q1 annoucement. Maybe open lower and close flat to slightly higher is my best take?
Mafee you need to look past the spin within - it is a PR company after all.
Pretty much in line with WPP but revenue down 20% is more than expected I think.
How on earth are you reading it as a profit warning when it states literally like 10 times in the document that Full year guidance remains unchanged, that second half of the year (as ALWAYS) will be significantly better, that debt will drop and "with an emphasis on deploying free cash flow to improve shareowner returns" = more buybacks
"as previously indicated" just does not cut the mustard here, however like wildtiger no stress and a great trading opportunity.
Reading it as yet another profit warning so a buying opportunity !
On balance, they're OK. £430m billings in Q1, Content sequentially showing signs of improvements, and debt to start dropping after this quarter. Some very early green shoot signs perhaps!!
Didn't warrant a 25% drop, IMO, in the past 3 to 4 weeks.
Opportunity here if they drop off the back of reasonable results like last time.
Im fully prepared for either up or down tomorrow, so zero stress. Look forward to the results
MaryBr190,
Looks to me like the chart has a gap up to 50p or a gap down to 40p on it but who knows.
Tradeable day tomorrow - the first move is the one to trade 34p or 70p ?
1msn
It's a good analogy you make with SAA. IIRCC correctly SAA had s boardroom bust up, accounts delayed and other various shenanigans which took them 3 years to recover from including an offer on the cheap along the way. It takes time for the companies to recover from own goals and to regain the markets trust. 2025 here is my guess.
I agree regarding valuation, S4 are cheap. Management just need to get their pricing right and move S4 Capital in to making its first profit. At this point we should see a re rating with our weak share price.
Nothing is certain.. But when you think within 10 % we are valued at the same as SAA... something is wrong. We have a world class team offering a world class product and any signal of green shoots .. and you will not be able to buy anything on the way up.. it will be gone.
1msn, what makes you so sure?
What's likely IMO is revenue will be down on Q1 2023, and Net Debt likely to have increasing after paying £11.4m in regards to final combination payments carried over from 2023.
Would not want to be short tomorrow