Member Info for BrokeNSmoke

'Surely a buyer will put shareholders out of their misery?' Lol - my thoughts exactly here for a good year now.

We've had this conversation many times though. SMS is unlikely to sell S4 for a pittance and buyers are unlikely to pay the premium he wants, especially given the lack of turn around here.

Ouch! Don't want to be that guy, but I did say they were going to be horrible after the cost saving announcement.

Market not down as much as I would expect on these results, probably due to the guidance. I guess the question is if we can believe said guidance? I personally don't see that tech client resuming spending.

Yeah some pretty good analysis and I agree that its all going to hinge on the outlook. Got to appreciate the skin in the game - GL!

Usually the leaky ship has started leaking by now so either we have finally plugged this leak or we are where we expected. Still suspicious about the cost reduction announcement in the TU notice window however, even though I agree with it needing to be done.

Nige - A fair analysis. I don't think the GM becoming a whopper will assist on turning the bottom line into break-even or profit. The last guidance we got is that the new business would just be replacing to a degree the lost tech spend. To be fair this is a positive in itself since we will be less segmented towards tech, but, I recall it pouring a bit of cold water on my own expectations. Obviously those assumptions are old now and awaiting new guidance, but I am not expecting much to have changed to the positive.

In regards to this financial year, I don't think the cost cutting will have a massive effect given all the restructuring costs that are presumably likely to go through. That said, as restructuring costs go below the line, it should hopefully give us an proper indication of next years performance.

Happy to be proven wrong as I still have an investment here, but I think 2025 will continue to be poor. Hopefully FY26 guidance will be better we remain cash generative. I have 2 concerns, 1) What impact if any there will be on the margin being squeezed from clients demanding reduced costs vs employee pay increases and 2) Any effects from the GBP to USD rate returning to about ~1.35.

GLA all

Finding some excellent articles at the moment Wolf - thanks

Same - could be a nothing burger or blow up into reputational damage.

Results are likely to be worse than expected.

To announce restructuring lay-offs after notice of results but before the actual update is very much playing shareholder politics. I can see the results being bad with the narrative that they are taking further cost control measures to combat the issues.

Not that I disagree with cost control measures here, its just the timing.

Basically, don't feed the trolls. Troll in our case

'a couple of possibilities are 1. a news leak for H1, which would've been shiite anyway and 2. All the traders who bought in early last/late on te merger news are throwing the towel.'

Probably both, sadly the last couple of years has leaked every time. Also expecting sh*te here but hopefully its at least in line with the sh*te H1 projections and not a sh*te surprise.

I think this is far from dead, I just don't agree with the under-priced gem narrative here.

Wow what a week to take a holiday. Looks like I missed all the fun.

'I'm with NigeCo that the best valuation route for us is the NYSE, but I doubt that we'd want to go down that route - it's way too much work for SMS.'

Yes agree. One of the business I work for did this in the last 5 years and all the IFRS to US Gap stuff and the necessary Sox compliance stuff is a giant headache and has sapped time and focus from elsewhere.

I'm sorry but I have to disagree with you all on the market valuation, the current valuation is fair value given all the risk. Agree it doesn't have financial distress issues, but the risk profile is so strong here. We have a business model that could potentially come redundant if all the wet dreams of Zuckerberg come true. our biggest segment is no longer spending with us and we are rushing to plug the hole with other customers. Competitors that have closed the gap on the AI front. Customers demanding price reductions knowing the AI efficiencies we are supposed to be making.The political and socio economic environments have just gotten worse year on year. Our balance sheet is weak, net debt and full of intangibles. All the mistrust in the management team from years of profit warnings. Not to mention we still don't have a bloomin succession plan!!!

Lol the entire market is concerned about the Meta AI, a prove market disruptor, who is putting in hundreds of billions to disrupt the market and we are the brain dead ones for having concerns and not being more interest in a fluffy piece from Monk.

Agreed JCJ, though I just think they are so underwater here they are getting nasty with anyone who thinks this isn't an amazing under priced gem.

'Ahem...not quite true, even though on the face it you might think that's argue. I suppose that's the difference between regurgitating headlines and doing critical analysis.'

I'm sure all/most of us here do our due diligence and don't just regurgitate headlines if thats what you are suggesting.

'The Journos ask him a question about WPP and is he meant to pontificate about S4's virtues in response to that question OR about the forthcoming IPG/Omnicom merger? Of course, they'd pick on the big beast (WPP) knowing that he was the man who took WPP to where it go to and I'd think knowing that he's still a stockholder there.'

I actually agree here, but that is a point in itself, why is it they have just stopped asking the Monks questions? It is not uncommon that interviews have questions that are strictly off the table.

'What I agree on is that he isn't an oracle, but the bet on tech clients hasn't quite panned out and they're pivoting. And pivoting isn't all easy in a dreary economy like the US is in now. Do I think it has distressed debt on the balance sheet which means its going bankrupt, NO. Is it generating FCF on a regular basis, YES. However, can it hit all-time lows and not bounce!! We have the answer don't we?'

No we don't have the answer. You have no idea how much top line revenue will be haemorrhaged over the next year. I agree I don't have an issue with the liquidity currently, but all this is downriver of maintaining their current spend and not shrinking further.

'well....I guess you need spoon feeding as to where he actually does ....'

To quote Wolf 'No need to be so condescending'. I read that article... half a year ago. How many interviews have there been since then?

'he does... there was a lengthy shareholder AGM statement back in June... and no doubt shareholder Q&A at the AGM ....he cant discuss market sensitive issues outside of the market'

That's being disingenuous and you know it. Ofc he talks about S4 capital during times legally obligated to do so. The posts if you actually read through them specifically addresses the many many interviews he does. Nobody is expecting him to reveal previously unknown marketing information but they do expect him to actually discuss his marketing business during a wider interview on the marketing sector...

Some interesting discussions today, so much better than the usual spam posts from our resident troll 'LOL this is going to BK LOL' type comments.

Like many free articles, there are kernels of truth wrapped in a narrative. I think we all have valid concerns, but that the share is worthless is just pure agenda.

I have no doubts that our next TU will be more macro gloom. I think the only reason to hold here is 1) the company is cash generative 2) the pivoting away from tech and diversifying their customer base. These are the reasons I held here for so long. Correct me if I am wrong here as I haven’t looked in a while, but the guidance was to remain flat, which means that all the new wins they have had will just plug the gaps in the floundering tech segment. I think we can only hope that this hasn’t deteriorated further.

The linkedin post was a lot more pertinent, on why isn't SMS discussing S4 capital and instead using it as a platform to rubbish his rivals. The comment about the adage about throwing stones in glass houses hits the nail on the head.

Finally, I still believe they knew fine well what Meta was planning as one usually does with one’s biggest customers. I still think that they continued the ‘tech spend will return’ narrative was dishonesty and I will still be reducing my position when it makes sense to do so.

'A new dotcom bubble? AI hype has yet to translate into profits'

Who knows, you can't tell your in a bubble until it pops.

What seems clear to me is that some AI tools seems excellent where they can significantly reduce or replace an expensive professional whom could take a long time to do a task, image/video creation, coding, data analytics etc. I think the SaaS model for these works and we likely see success models similar to AWS where the large tech capital requirements which have a relatively short useful life and need replacing every few years(GPUs rather than servers) are sold upon elastic usage.

On the other hand, Microsoft seems to be trying to find excuses to cram AI co-pilot into anything to try and claw back costs.

The one to watch for us is clearly the Meta AI, whether it is actually any good. Clearly the market is not liking S4s chances.

On a side note, it should be nearly time for one of our quarterly 'macro headwinds' statements from the chief. Anyone want to guess when?

How are they averaging down? The last RNS was a reduction in their position

A halt in the decline in UK advertising would suggest a bit of optimism on the UK economy front and I highly doubt that is the case. Consumer spending is down and savings are up. The downward trend may be decelerating but we are far from any kind of recovery.

I suppose its a good thing S4 mainly operates in the US then. If the US side is true then its no more 'macro' excuses for the old boy.

404 – I agreed with your post the other day re heads in sand and my initial impressions from this board was one of cope.

404 & 1pencil - I personally understand well the problems of trying to budget where big uncertainties exist or events out of one’s control completely trash your budget. Being Uk based exporter to the EU during Brexit gave me plenty of experience here. I have defended the management team in the past due to this understanding.

That said, I personally think the Meta announcement will be the end of tech a lot of tech revenue for us. Given that the narrative over the last few years has been ‘when the tech spend returns’ and is unlikely ever to now, it puts us in a much worse position in comparison to competitors. Moreover, I just don’t trust that the management team didn’t know about this, that one of your biggest clients is looking to make you redundant in their value chain is something you tend to find out about. The trust is well and truly broken for me.

Regardless – I will you all luck.

1pencil - I am sufficiently diversified but thank you for your concern

By 0.1 percentage point? Independent indexes like truflation also have inflation in the 3-3.5% range for the past month and I have found it to usually be correct and ahead of the curve so I do not doubt the figures that the CPI will remain sticky at this level. I just don't think that a rate cut to boost the economy is the prerogative here, given continuing declining state of the country's economy whilst the BoE continues QT. If economic stimulus was the goal then they would have at least ended QT....

Its easy to have the benefit of hindsight when making these posts and GoCPI makes some good points. That said for years now he has been saying the recovery is right around the corner. To be fair to him, this has been the company line and can only go off the information available, but that is my point, the company has time and time again proved the forward guidance to be wrong. After years of getting it wrong, at what point do you start to flat out distrust the management team? That is where I am with this