Ok, I’m struggling s bit on squaring this move. If TAP are going to be the majority holder on paper don’t they need to give us around £40m in cash to deal with the market cap imbalance? TAP had been consistently talking about an acquisition so that would normally mean a premium for the target but that is far from clear too. Of course if 3 major shareholders say yes it’s a done deal anyway but no idea what this does for the valuation of R1.
I see this is steadily improving in the rankings now we're 16th in the 1000 ranking. They've got a shift on in the last week too. On all 4 lists they have made more progress on the actual numbers in the last week than they made in the previous 6 weeks. On the 30,000 list they have increased by 61 since last Thursday to 2568 from 2507. On 6th Dec they were at 2442 so 6 weeks to put on 65. They've only put on more than 60 in a week 3 times since Apr18.
Anyone would think R1 were getting their act together.
I see after all the fuss made on ADVFN over the last quarter 'decline of 50%' that R1 seem to have gone up 900% in the latest quarter. I assume we can read boom in to that if 50% decline meant bust?
I see there is a new article on the R1 website further demonstrating R1's focus on fraud.
I like the idea of machine learning. I've emailed them to see if they can identify messages with both Stt1 and GDPR in them, so they can be automatically blocked as invalid traffic. Even though he's filtered there still seems to be plenty of noise in response to his likely multi-repeated posts. It's worse than pervasive ads. The EU should pass some sort of law and take action.
1GW, Do you think R1 would be a bit too much of a stretch for TAP? Assume around £225m, c£3 a share, needed to take R1 out now of which they have about £50m cash and R1 is likely to have c$40-50m cash that would mean debt of around £120-140m or a share placing. When TAP was £3 a share and £250m market cap that would be easier but now at £120m market cap that's a big placing.
Equally if R1 had a track record of profits that may make it easier but I guess the R1 value would be higher if that was the case.
I think TAP are looking at a smaller target though that is why I increased my holding in R1 over recent months as I do think R1 is vulnerable to a predator at the moment.
I had a call with Mark Bonney at the end of July as I missed the AGM. Nothing then until an email exchange before and after the H1 release which I posted the initial content on here.
Mark’s view after H1 was the focus is wholly on delivering the numbers this year to build confidence and the share price then follow.
I see no chance of a profit warning as that would already be out by now if they were more than 5% off concensus profit. Still a question over what revenues will look like this year (I’m at 375m) and for next year which would be a clean comparison for once. Signs of organic growth and the share price should fly.
I suspect we will get a TU, possibly next week. Last year it was 2 Feb but I think that was later than normal partly down to the YUME deal. Of course the counter is that they'll wait til mid Feb once they know the shape of Q4 trading given last year was very weak.
I'm interested to know what they will include as I don't think they'll publish the volume, fill rate / price metrics any more. Ted hated doing that but was trapped by customer and practice. I get the impression Mark and Eric are their own men and will put out trading detail they are comfortable with.
Just for info, the 3 trades for 5066 shares this morning around 9.30 were buys not sells. I suspect the other two trades for 5073 shares were buys too but they weren’t mine so assumption rather than fact.
Added 65k shares since yesterday lunchtime now. Hold too many really but am hopeful trading will have been good in Q3 and that they will confirm details of the buy back and kick it off straight after the TU.
Haven’t ruled out a low bid coming in either (I certainly hope we don’t acquire!). Still think a £3 low ball offer could come in if trading and cash is strong so will hold up to that level but will probably sell down some once we trip that level.
I don’t think it will start now until after the Q3 TU as they are in a close period until then. They will issue an RNS giving the specific details of how it will run such as whether shares bought will be cancelled or held in treasury and any limits around the price they can pay eg no more than 5% above last 5 day average.
Tardis, it shouldn't take long to get it started given they have shareholder approval and had been intimating for ages it would be second half. I can only assume the decision to formally commit was made in the day or so before results announcement so they couldn't be clearer on the exact mechanics. I believe they will need to RNS exactly what will happen (ie if shares cancelled or in treasury, timescale) before they start it. Taptica put a buy back RNS out only last week so take a look at that one to see the sort of detail I would expect R1 to publish.
1GW, have been through my forecast and for second half have left the margin same as H1 (though they may eek out a small improvement) on a second half revenue forecast of $200m. Ops expenses pre exceptionals I've reduced by $4m on H1 to $72m. This on the basis that there will be annualisation of H1 savings and I expect them to make more savings as H2 progresses.
Allowing $3m exceptionals in H2 and the same finance/tax impact of $1.3m that would give a real Profit for the year of $12m. Full year Adj EBITDA would be c$55m.
Given most of the areas will be fixed then for every $10m extra revenue $4.5m would drop to the bottom line.
Cash bridge is more difficult as they keep changing the bridge info. latest one didn't start from year end closing cash of $27m so shooting in the dark a bit. Assuming working capital $10m unwinds and the above profit then I'd be about $60m before buy back or acquisition.
Overall H1 was better than I forecast running in to H2. Assuming revenues come in above $375m for the year it should give plenty of room for further buy backs or small bolt on acquisitions. I really do hope they don't do any larger acquisitions this year.
I am surprised the share price hasn't moved further. With the $31m current cash comment in the webcast it must be getting more difficult to find the negatives in this story.
I can see why the institutional investors were increasing their holdings.