Member Info for 1GW_

Ejackson - SPD converted their CFD position into real shares in 2016 didn't they?

I believe SPD have held 25.85m shares (just shy of 30%) as of 6th June 2016, unless I have missed a subsequent notification.

As for the "excuse" for the directors not buying shares, I'm not sure it is lame, just unusual. I presume the Nomad is tasked with advising the company on how best to maintain sufficient free float for there to be a reasonably liquid and orderly market in the shares. Over 90% of shares held by the top 7 shareholders would reasonably seem to put stress on that scenario unless 1 or more of them is actively selling (as Schroders perhaps has been doing recently).

"The concentrated nature of the Group’s major shareholders, as noted in the Directors’ Report, is putting the Company’s compliance with the Listing Rules “free float” requirement under stress and the Board has therefore adopted a moratorium on its members acquisition of additional Company shares for the time being."

I don't think I've ever seen that as a reason for directors not buying.

But the concentration is remarkable, even after Schroders have slimmed down 1%. I have to think this is perfectly set up for Sports Direct to swallow it whole, if only they could come to terms with the 3 big shareholders...

Another big trade this morning - and at a higher price than yesterday's big trades.

Another bizarre feature of your posts STT is this apparent obsession with "well-written posts".

I am flattered if you think I write well, but if you think I do, why is that a bad thing? Would my posts be more useful if badly written?

And you also seem to be suggesting that it might be a "bad thing" to be informed or knowledgeable? Is it wrong to use a "knowledge of accountancy" to try to argue points? Let me state for the record, again, lest anyone feel misled, that I am not, nor have I ever been, an "accountant" but I do like to see if I can spot patterns, make deductions or form hypotheses from the numbers and statements that I am given by companies in their accounts.

I also think I am more likely to get a discussion going on a bulletin board if I take some time to write a post as well as I can and get the facts right in the post. Surely one of the main points of bulletin boards for investors is to leverage each others' insights and analysis isn't it - to try to close the information/analysis asymmetry ever so slightly on the institutional investors?

I accept that some (maybe even yourself) are here just to broadcast a view for motives completely unconnected with investing and are never going to be persuaded to change their views because of a reasoned post (even a well-written one). But some on these boards are prepared to engage / respond on reasoned argument so it seems to me worthwhile continuing to post in that way.

STT: the question you asked - "Do you now accept that revenues for fy2019 are going to hugely fall short from the initial revenue forecasts of last year - F4, which was used to persuade 1R and Yume PIs about the deal."

It's difficult to know where to start with that question.

If 4 years of being invested in R1 has taught me anything it is that revenues are unpredictable. So I would be amazed if anyone would accept anything as being definitive about R1 revenues for FY19 where we have 3 quarters still to go including the (hopefully) big calendar Q4. What investors, analysts and others do do is try to come up with sensible estimates at a point in time of what revenues might be given some particular assumptions. And as information comes to light that undermines those assumptions, sensible investors, analysts and others adjust their estimates. [Any of this sound familiar from your own cut and pastes?]

Then, this point you seem to keep trying to get other people to believe that there were some forecasts in the F4 for revenues from the combined R1-YuMe business. There were no such forecasts (please correct me if I'm wrong on this). What happened, as far as I understand the process, is that R1 gave the YuMe board some indicative numbers for how R1 metrics might look in (calendar) years to come as a standalone business (i.e. without YuMe) as part of the beauty parade process that YuMe was going through to select a strategic partner (or sell itself). At some point after the proposed merger was announced there were some suggestions (I think coming out of those trying to get class actions off the ground) that R1/YuMe had withheld some important information from the prospectus. Accordingly, although they were never meant to be publicly disclosed, R1 and/or YuMe decided they should include the numbers in the F4 - I think to try to reduce the chances of a successful challenge on the basis of withholding information. So those numbers went in. But as soon as the merger happened, those numbers immediately became useless, since a key assumption (that R1 and YuMe would not merge) underpinning the numbers was invalidated by the fact of the merger. And in fact, R1/YuMe explicitly stated what the circumstances of the "RhythmOne Projections" were, including "The RhythmOne Projections ... were not prepared with a view to public disclosure, except to the parties identified below..."

and the revenue post (5387 from advf n)

If reflection has made me more positive on cash generation run-rate, I think I am less positive on revenue run-rate.
Going back to the quarterly metrics, I back out that revenue in 4QFY18 was only about $62m. This included only 2 months of YuMe which contributed $17m of revenue. Pro-rating the YuMe revenue up to a full quarter's-worth would add another $8m or so to the quarter to give a total of $70m
So that to me looks like the revenue run-rate, based purely on 4QFY18 numbers, is around $280m.
Now clearly normal seasonality (i.e. a big calendar Q4 / financial Q3) would tend to bring up the annual revenue from this financial 4Q run-rate based number, but it's still going to be well short of $400m, never mind $500m if we adjust only for seasonality, taking the $70m number as a reference. R1 have said (in the results presentation webcast) that financial Q4 was weak and that Q1 had bounced back. So it will be very interesting to see what the actual Q1 revenue number is if they do provide the usual volume / fill rate / price stats in a quarterly update around the time of the AGM.

wouterius - full post then:

Ops cash run rate (post 5386 from advf n)

I put up a post earlier (post 5255) where I said I thought that the $21m "cash from operations" number in the 19th April TU didn't really relate to what is normally referred to as the operating cash lines in the formal cash flow statement in the accounts. I said that in the accounts the $14m-$15m operating cash generation in 2HFY18 was effectively down to working capital movements.
Having spent more time trying to reconcile the various sets of numbers I'm coming back to the TU way of thinking. The issue here is that the cash from operations lines in the accounts include exceptional operating costs. In particular they include the transaction costs and other professional fees associated with acquisitions, as well as severance costs and other one-off operating costs.
In the accounts, there is $19.1m identified as "Total net cash outflow arising on acquisition" for YuMe. But there is also $8.6m of transaction costs. There is then a further $1.6m "onerous lease" cost identified under "acquisition related costs" in the table of exceptional costs in the year that was not in the 1H accounts. In the same table, there are $11.0m of professional fees identified as acquisition related, compared to $1.2m in 1H, so $9.8m in 2H.
So we have $19.1m of cash outflow on acquisition, $8.6m of transaction costs and a further $2.8m of 2H acquisition-related costs (the $1.6m onerous lease plus the $1.2m difference between the YuMe transaction cost and the 2H $9.8m acquisition-related professional fees).
If the costs all equated to cash spent in 2H then we have:
$30.5m = $19.1m+$8.6m+$2.8m
Going back to the TU cash bridge they identified $26.5m of cash costs for YuMe in 2H plus $4.0m of acquisition related costs, a total of $30.5m.
In the cashflow statement, the $19.1m acquisition cost was in the Investing Activities section but the other $11.4m is in the Operating Activities section.
If we add this $11.4m of acquisition-related costs back into the 2HFY18 operating cashflow lines to see what they would have looked like without the acquisition-related costs we would get:
$9m Operating cashflow before movements in WC
$26m Net cash generated in operating activities (pre-tax)
$25m Net cash generated in operating activities (post-tax)
Which is a much happier position to be in than having to rely on working capital movements alone to generate ops cash.
Happy to be corrected on this. I note that the $25m/$26m numbers are now higher than the $21m "Cash from Operations" number in the TU, and by more than the $1.4m difference in Ending cash balance. So it's perfectly possible that there's still something not quite right about the analysis above.
But on the face of it, it looks to me as though the business we had at the end of FY18 was generating about $10m per half, before considering working capital movements.

I've put 2 posts (5386 and 5387) on the RTHM thread of ADVF N on ops cash run-rate and revenue run-rate for anyone interested.

My conclusions were that on ops cash, I now think R1 was generating around $10m of ops cash in 2HFY18 before working capital movements if you strip out the acquisition-related costs. The actual number I calculated was $9m, but with only 2 months of contribution from YuMe.

On revenue, I calculate that the run-rate based on 4Q adjusted for a full quarter of YuMe would be only about $280m. This is without any adjustment for seasonality (strong Q3FY). R1 have said 4Q was weak, and this tends to back up that statement given the "consensus" revenue numbers for FY19.

So positive on ops cash, negative on revenue. And happy to be corrected if you think the analysis has errors in it.

Cheers bmac. I prefer to post on the other board in part because it is searchable. I use the bulletin boards as both a prompt to do research and as a filing system. On the other board I can generally find something (e.g. earlier notes on particular institutions) if I want to, whereas I find this one hopeless for that.

Since STT is for some reason quoting an old Whitman Howard forecast, perhaps it would be useful to consider something more recent, which addresses a reduction by WH in their revenue forecast for FY19: "19 April 2018 RhythmOne (Buy PT770p) has today announced a full year trading update. Results are in line with expectations and they also expect the year to march 2019 to be in line with market estimates. We will adjust our revenue numbers down as they are focussing on the highest quality sales, but we are not adjusting our EBITDA forecasts which are Year to march 2019E of $58.4, vs consensus $54m and 2020E of $68m which is consensus. With a 22% FCF we retain our Buy and PT 770p" https://*********************/companies/uk/web/rhythmone/research/whitman-howard/results-in-line-22-fcf-yield-forecast/c83463ab-5953-404b-999f-15fa6116149a

I guess high on my own list would be that R1 get more granular on FY19 guidance. It is great that they have said they believe they are "well-positioned to deliver a further strong performance in FY19 - fully in line with current consensus estimates in market" but I would like to see them translate that across to specific numbers, at least for revenue and (adjusted) profit. Given we will be almost at the end of the 1st quarter of FY19 when they report results, they should be in a pretty good position to say that 1Q performance is (or indeed isn't) on track to deliver the FY19 consensus of $xm revenue and $ym adjusted profit.

I mean of course, they quote a low, a high and a mean.

The reuters numbers are interesting, not least because there are only 3 estimates so you can work out what each one is (since they quote a low, a mid and a mean). FY18 Revenues: $255m, $255m, $265m (to give mean $258m) EPS: 8c, 11c, 20c (to give mean 13c) EPS: 6p, 8p, 15p (converted at �1=$1.34) Comment: since R1 guided to "at least $255m" revenues in the TU, it seems the high revenue estimate is probably out of date. FY19 Revenues: $430m, $436m, $487m EPS: 50c, 58c, 60c EPS: 37p, 43p, 45p (converted at �1=$1.34) Some of those numbers are familiar from analysts reports that I have seen (the $255m and $487m revenue numbers for example). Looking at FY19, it looks to me like at least 1 of the analysts (and probably 2) has revised down on revenue (2 estimates at $430m, $436m). But it doesn't look as though the eps estimates have changed much for FY19 since the pre-TU reports I have seen. One other point to note. These are almost certainly "adjusted eps" numbers not IFRS eps numbers. https://www.reuters.com/finance/stocks/financial-highlights/RTHM.L

The Edison note finishes with a table of shareholdings. I have slightly different ones, based on holdings notices and the annual report. Barrons and FT have broadly the same as each other, and the same as mine for the 3%+ holdings with the exception of Standard Life, which none of Edison, Barrons or FT report as far as I can see. The FT reports only institutions so doesn't have SPD. But whichever way you look at it, it's a pretty concentrated shareholder base with not much space for private investors. Taking the Barrons/FT view, we have: 29.9% Sports Direct 19.7% Schroder 18.3% Toscafund 10.0% FIL 4.9% Henderson 4.5% River & Mercantile 4.1% Aberforth Over 90% held by the top 7 holders. Edison also have over 90% among the top 7, with the main differences being they have Schroder at 22.5%, don't have Aberforth but do have Merrill Lynch at 3.5%. We should get a "definitive" view from the annual report when that is published. https://www.barrons.com/quote/stock/uk/xlon/fdl?mod=DNH_S https://markets.ft.com/data/equities/tearsheet/profile?s=FDL:LSE

Very nice write-up from Edison. I missed it this morning.

That's a very big trade just gone through at 282p.

Ejackson- they do talk about what they're doing with spd in a couple of places. Trial of selling some products and something about supply chains. So definitely some progress there.

Encouraging, except for the derivative hit.

So are you saying you don't know when TLY are going to publish even a TU on FY18 performance, never mind publish actual results. And yet somehow you appear shocked that R1, who have already published a TU and confirmed the outlook again today, can't yet categorically confirm that their auditors are going to sign off on results that are in line?

As I've pointed out on another thread, I don't see how R1 can say anything other than that they "expect" performance to be in line, if they are planning to release audited results around 14th June. i.e. they have to wait until the auditors have signed off the accounts before they can confirm that they have met expectations. In terms of stt1's statement "It's nearly 2 months since end of fy2018", coincidentally I am also invested in Totally, as is stt1. A recent statement issued by TLY gave their timetable for results: "Publication of audited accounts for the 15 month period to 31 March 2018 by 30 September 2018." So TLY's financial year finished at the same time as R1's. presumably TLY are not going to be able to make any comment stronger than "expecting" performance to be in line (or otherwise) for quite some time. I can only imagine how incandescent with rage and dripping with sarcasm some of stt1's comments must be on the TLY board, given such a delay in publishing results there...