Member Info for Brassneck

Eddie, I get it through Research Tree on subscription - it's a decent service to help research shares and broker views etc. Link below to the latest note, not sure how much you will see if you don't have a subscription. https://*********************/companies/uk/web/rhythmone/research/whitman-howard/revisiting-the-buy-case/e461bf6a-4548-4076-b1b0-02d8568729e3

Stt, get that note posted quick, they mention ads.txt and GDPR!!!! And blow me down they didn't conclude R1 is about to go bust because of either.... R1 is less exposed re GDPR as it uses anonymous meta data - apparently. They also don't think they're about to run out of cash but that management will focus on buy backs and dividends. You need to read it and post the negatives as I couldn't really see them on first read. Thanks Biffa for the heads up.

Stt, you omitted to paste in 6 or 7 links...

Interesting 3 posts Bmac. Again i find it hard to believe them all though, don't they know GDPR is coming which will trigger the collapse of every business even before ads.txt impacts fully. Lets just see if there is any advertising going on in 12-18 months yet alone billions more being spent on digital advertising eh?

Agree with much of that Stt. What is your view of R1's likely FY18 Revenue, Adj EBITDA (both ignoring Yume) and then Cash?

2oco, surely James Murphy meant to say fee transparency, ads.txt and GDPR are top of mind for advertisers and not stupid value adding areas like quality traffic and brand safety?

Stt, sorry for the delay but I've been trying to find your own opinions with supporting rationale within your posts but haven't had much luck. I found lots of links and pieces you cut and paste in there. I even see that on a thread about how various changes in the ad tech world will impact the future of R1 that you devoted 33 lines on my mobile to a profit warning in 2014 - given it is now a completely different animal now with 3 major acquisitions and a new management team I can't believe you included this thinking it was relevant. It wasn't even the most recent profit warning. I think GDPR has been answered by others very well. Nice of you to paste in some stuff on what it is with a helpful link though. In summary it is law, any PLC would be negligent if they weren't compliant. Ad tech will quickly establish industry norms and best practice to manage it. It will have no impact on the relative position of R1 vs its competitors. It won't cause a collapse in general spend on digital advertising or reverse the growth in spend moving to digital ads and mobile in particular. Feel free to put forward a case for why R1 will suffer. Ads.txt I think we are probably of a similar view here. R1 have more to do based on Pixalate Global Sellers. I don't know how they compile all their measures so don't know if not being in the top 10 is an issue. R1 are 18th on Quantcast but we're 5 on Comscore. I would like to see their Pixalate score up to early 90s in the next 3-6 months vs the 75% in November. I'll be asking the BoD at the AGM to see what they think. They may comment with the annual results when they give an overview of market trends. Fee transparency, I'm no expert but do not believe anyone placing ads will put fee transparency above any of 1. Likely return on investment, 2. Clean fraud free inventory or 3. Brand safety. If all else were equal it may come in to the mix but we're miles away from that in what is still an immature programmatic industry. I'd much sooner R1 put their efforts in to ways to win on the three areas I've listed rather than fee transparency. That's where competitive advantage lies. I just don't see it as an area of competitive advantage, they could make their fees transparent tomorrow and if it would make a difference I'm sure they would. Whereas other companies can't announce tomorrow that they will be in top 4 on Pixalate Global Sellers as it takes a load more effort to achieve that. Of course if you're at number 25 on Pixalate then talking about fee transparency is more attractive. All companies talk their book, R1 is no different. So in short it's only ads.txt that reallŷ interests me and that is in effect an industry standard file format so it's just a matter of how quickly R1 adopt it across all their partners plus getting the Pixalate score up to support their overall Pixalate ranking.

Well Stt, I thought I'd post my views on fee transparency, one of those industry challenges you were keen to keep throwing around yet don't seem to want to engage on. Now this one needed some thinking about so I'm not expecting a quick reply as original thought seems a stranger to you. Also for this one I did a quick survey amongst friends - I suspect you may struggle to do anything similar. So, there has been a bit more reporting of fee transparency but I think it is a relatively low level trend at the moment and not something to be too concerned about, probably for at least the next 12 months. I think most companies spending on advertising on line are principally concerned with getting clean, fraud free inventory that delivers a strong return on investment at market rate. This brings me to my survey: I asked a few friends whether with their pension they preferred to invest in a) a strong performing fund, consistently delivering excellent returns but that didn't disclose its fee structure to anyone, or b) a poor performing fund, consistently delivering poor returns but gave you a line level breakdown of everything they spent and charged Now all my friends went for a). I didn't therefore use my follow up question that said but what if b) had regular convictions for fraud, as no one plumped for b). With regard R1 I couldn't really find anything in fee transparency, the only article they were asked to comment in they didn't. I don't know whether this is because they see this as confidential, they were busy on the F4 at the time, they asked the wrong person or they just couldn't be bothered. I suspect those businesses that struggle on clean inventory or low ROI may talk more about fee transparency. R1 are at the upper end of the industry and I hope they continue to talk about fraud free traffic, premium inventory, PMPs and getting high return on investment. They don't need to talk about fee transparency as a selling point, they have many more stronger points to lead on. If you do end up doing a survey Stt and you find people that do just want fee transparency point them in my direction and I'll set up a fund management business with the most transparent fees you can imagine. Well that's the toast finished so it's me done. It will be safe to come back to LSE soon Stt as all my posts will be consigned to page 2. Nice that you read them though.

Thanks bmac, I don't intend to keep it up but have quite enjoyed it today. At least it got over a quiet few days on the board. Roll on the April TU

Four posts in a row, that's a record for me. I expect that's because you're busy putting your own analysis together on the industry challenges Stt. Just in case you're struggling I thought I'd let you know how I've got on with Ads.txt and how I apporached it, it may give you some pointers (apologies to other BB readers, this may be a long post). First, I typed in to google 'what is ads.txt?' It came back with 1.5mn results. Initially I thought I recognised 1.4m of them from your posts. However there was a summary saying it's an IAB initiative to promote and improve transparency in programmatic advertising - that sounds like a good thing to me. It looks like it's a file format/specification for ad tech publishers to adopt. Excited by this I went on to the R1 website where I found a blog from November. It turns out R1 think it's a good thing too and they encourage their publishers to set up their own ads.txt file and actively works with them to implement it. I couldn't find any R1 comment saying they thought it was a fad and they were ignoring it or that they had never heard of it or the IAB before. My view is that this is a file format from IAB promoting transparency and reducing fraud, it's a good thing and all ad tech companies of repute will adopt it. There is no sustanable competitive advantage here or USP. Some may be slightly ahead of others but it won't be material. I do think R1 need to keep active in this area and push it hard. Pixalate included it in their Nov ranking for the first time (I don't know exactly what they are measuring but it was a heading) and R1 have some work to do. I'll be interested to see how R1 score changes over Dec, Jan and Feb when the next update gets published by Pixalate. Outside of Google all ad tech companies in the top 20 have work to do as none were rated A. I have to admit I don't know if it is for them to roll it out or the publishers they work with to adopt it and pass the file to R1 for them to process - they obviously already have capability to handle the file format. Perhaps back to Google for that. So yes, it's a factor but R1 are engaged. Again those companies that operate at the dodgier end of ad tech will have problems and lose out. Those trying to get clean inventory will benefit. R1 could be a beneficiary therefore. It may be an area I question the BoD on at the next AGM.

Stt, you have been busy this afternoon, cutting and pasting away. Do make room for some thinking and analysis. On payment terms I think there is a clear trend for longer payment periods, again widely reported. It will mean that ad tech businesses will need to employ more working capital. R1 have acknowledged this. I think they may struggle to hold to 100 days and possibly some of the analyst projections for free cash flow will have to be dampened. I'm glad the trend didn't impact a couple of years ago as this may have been more problematic for R1. However, I think they now have sufficient scale and profitability to feed the working capital requirement and post Rad1 and Yume still throw off cash. Ad tech businesses that don't have the scale or level of profitability that R1 has or don't have a cash pile may be in more trouble. I hope this is the case and R1 benefit form any weak players either going bust or becoming cheap takeover targets. What is your analysis of the situation? If you don't want a debate on the industry challenges though and prefer to just provide a cuttings service of negative aspects of the ad tech industry please just paste the links and spare us any of the drivel that seems to accompany the links. I have to say I'm quite enjoying our discussion on these areas much more than making sarcastic quips about the abuse you seem to attract on these bulletin boards.

Stt, I'm glad it was interesting for you. A shame it wasn't interesting enough for you to either agree or post your own thoughts on the issues. I thought you wanted debate? I'm more than happy to hear a counter argument as I know I have a rose tinted view as I'm actually invested here. I see you also managed to avoid your synopsis of how ads.txt and fee ransparency will affect the ad industry and R1. I haven't really looked at these but will give them some thought. We can perhaps debate these in due course.

Stt, why not post the whole story and your view then instead of two sentences that infer 13% growth despite the acquisitions. Where was the 72% growth from continuing operations in your first post or the 77% now the case from Q3? Your just illustrating to everyone the lack of substance in your posts which fall apart when challenged.

Stt, R1 are quoting a like for like figure of 13% rather than business now with Perk and Radiumone in vs prior year without. If you multiply out the metrics that they always transparently publish it gives you their revenue number (in all material aspects). This shows the total revenues up 89% on last year. This is where I feel you always fall down in wanting to post the negative on everything rather than looking at all the info objectively and posting a rational opinion. If you did this I think you'd get much more engagement and the debate you seek. Whereas sloppy negative cut and paste headlines simply re-enforces everyone's view of your agenda. The revenue info published each quarter is not a ramper or deramper issue it's fact that even your calculator should come up with. You may have a view that it should be more than it is but it is what it is and that's up 89% in total on last year for Q3 and up 77% for Q3YTD.

So nothing like a bit of speculation! I don't think we'll get any news now until April TU. they'll run Yume to a 15 month financial year and bring in line with R1. TU would then cover both through to end March. On cash I'm more hopeful they will hit analyst expectations of $35-40m. Yume had around $39m at Q3 from memory and over the next 6 months I would expect that to grow to $45-50m. Assuming R1 unwind cash as they said at H1 and generate free cash in second half I think around $10m should be achievable. That's enough to cover the Yume acquisition cash element leaving close to the $39m R1 had at H1. On GDPR I'm not expecting near term impact, not least as 80% of revenues US based. Also it affects the whole ad industry so I expect some common standards / best practice to emerge that all ad tech will adopt. I'm sure there will be some Op Ex to deliver this but overall good news as weak or dodgy businesses will hopefully fail at this hurdle. Google ad blocking, again, I don't see a big impact. From what I've read they are really targeting the most intrusive ads rather than more general. They will have to apply their standards consistently or else regulators such as EU will hammer then. I don't expect R1 to be operating much in the space of these most intrusive ads. Apple safari changes, don't really know here. I'm hoping not greatly impacted. Criteo has been surfaced as being impacted to a high degree, if R1 were too I would have expected to see them called out too and Stt to have posted it several times. It feels like the full stack model R1 are pursuing doesn't have a reliance on tracking. Hopefully R1 will comment at FY results in more detail on this and Google. Certainly areas for AGM questions. So plenty there for debate...

Jan data out but R1 not listed!! Only Radiumone

Stt, didn't see any mention of it at all before Friday's RNS. I see it as a big positive though. Much sooner have Eric on board rather than SC. also better to have some Yume directors on board to help manage delivery of value. They had to remove some rather than just increase the number. They just didn't tell us! On the cash front Yume shareholders also gave us c$40m of cash they were holding too. The structure of the deal was a good one and leaves R1 in a great position to deliver material profit growth and hopefully share price growth with it - which is what most of us are here for.

At �2.72 it has to be a buy I would imagine. Quite possibly Tosca moving to increase their holding. I expect them to move back up towards 29/30% over the coming weeks.

Arthur, R&M haven't ditched 30%, that's the effect of the Yume additional shares dilution.

Yes I would Stt but don't think it would be material enough for a broker to change target price. It will be a one off 2 months of revenue/profit. If they came out with Yume FY17 results and said they were positive and cash c$45-50m that R1 picked up then that may encourage a small rerating.