Member Info for GoCPI

I love Covenants, more so when Aliens are involved.

90p soon - interstellar buying coming through!!

Right you are, Nige. I'd hoped (against hope) that Labour would drop their tax till you die mantra, but not to be. They passed on a wonderful chance to show that they are really a 'open for business' party, but nope that didn't happen. At best, they can now only hope Trump doesn't put tariffs on the UK as that would certainly mean that the UK can keep kissing its own a*se for the next 4 years, and the tories will be back in power. Let's see!!!

Spot on, PC. There may well be some net cash outflow in H2 driven by the ongoing layoffs, but that clears the path for better cash flow generation even with stagnant revenues next year.

And this... https://finance.yahoo.com/news/global-markets-reel-trump-america-034031299.html

For all intents and purposes, we're a US company as that's where 80% of our revenues are from. As such we have 2 tailwinds - booming markets/economy there, and then the US election uncertainty out of the way and that should focus (tech) companies marketing spend in 2025. MS did spit out an interesting tidbit on the earnings call - our revenues growth is very highly correlated (didn't he quote like a 90% figure) to META's marketing spend growth.

All I can is I'll wait for the traders on here to thrash us down to where the price becomes too tempting/cheap for a rational investor to get their share of this company. GL..

We shouldn't let facts get in the way of a narrative. After all, that's all that matters on the deepest stock market in the world, the LSE. ;-)

If only we have a fifth of the depth of the US markets, the days of valuing a stock based on purely revenue growth would be long behind us. But then I suppose it's Martin's call to have us listed on this god forsaken stock exchange. Lol..

I know it looks quite dark out there (for S4) at the moment, but have added more sub 30s a short while eralier. Added another 3% to my overall holdings this morning. I'm keeping the faith through these dark times. :-) Can't wait for 2025 to roll in.

"i'm still here because i think they have good model and think they will return to having a decent business model if they can transition from tech or tech comes back, but i don’t think the later is very likely."

brokeNsmoke - yes, I'd also wager that the latter scenario is more likely than the first. OK, we know that GM will be a decent revenue earner from 2025, but getting new whoppers on board isn't a simple on/off switch. Sales cycles can be long and with the US election holding back activity till a few days ago, I wouldn't have thought there would be much of that in Q4 24. However, smaller projects could come back online this quarter, and broader tech spend could moderately rebound in Q1/Q2 25 - I don' think Trump would do a lot to try to impair tech giants like GOOG. META was already sucking up to him anyway. And they can now start planning their budgets in earnest.

Before I really start to despair at the performance of my S4 investment, I'd really want to see how revenues are trending in Q2 25 - we just may be pleasantly surprised. All IMO.

"the company is in trouble and hence the sombre mood you refer to. Maybe it's time to put the rose tinted spectacles back in the drawer."

Nope - net debt is lower even in the face of falling revenues - that isn't a sign of financial trouble. Not yet anyway. We'll know the scale of job cuts when we get the Q4 update in a couple of months, but they may well be substantial and any turn upwards in revenues will help FCF dramatically. I'm also realistic that a revenue YoY growth may not come about till Q2 25 now and we could be in for a period of volatility where the stock price is buffeted around, likely to the downside. You and I'm sure many other players in the market and many on here have given up on S4 and are factoring in a 'bankruptcy' type scenario - that's all well and good for me.

Every little dog has its day/quarter, and the last few quarters happened to be yours. Although I'm not sure if you've acted on it and actually sold/went short? But the tide will turn with further lowered interest rates and a change in US government setting the path for more optimism in the economy. THat's when the cheques come out and S4 has a good shot at redemption. 2024 didn't quite cut it, but 2025 is a new start!!! All IMO. And I'm still very long.

"They are lagging the others because they don't know what they are doing, pain and simple. They can't integrate the business, they are paying themselves massive wages whilst globetrotting on company expenses, they can't forecast, keep blaming macro when the markets are booming, eternal profit warnings etc etc. How many more reasons you need"

That's BS, jcj. And evenone someone as bitter as you knows that's true. ;-) I'll spell out the simple reality for you - MS bet the house (or near enough) on tech sector marketing spend and that's just not come back since 2023. Will it ever come back? I wouldn't bet against it, even if its marginal in 2025. When the sector was firing on all cylinders back in 2020 thru 22 we didn't get many complaints about the stock price did we?

It's hard to pivot quickly from such a heavy sector focus to something akin to other other Ad agency firms like Stagwell. And this is where S4 has been caught out. I'd think that Martin feels humbled and he's certainly looking and sounder sombre. I'm sure he wished S4 was more sector diversified, but that's where he let the chips fall. But his Trump card, Trump (pardon the pun), is back in power in January and that will give the US economy the all-clear to start firing again and S4 will benefit off a lower cost base. THat's my bet. Can it go to the 20s in the short term - of course it can, and you or I can't really influence that outcome. I'm slowly running out of dry powder to add more here. But nibbling I am.

"This is indeed an existential issue, also, the debt is almost as much as the market cap. Very very risky in my opinion." Here's my problem with this statement. It is only ever an issue if (net) debt keeps growing with a near term debt maturity in sight. Neither of these are true in S4's case. We've already seen net debt drop in Q3 and likely to drop further in Q4. Depending on the magnitude of cost cuts in Q3/Q4 this year, even with marginal to flat revenue growth in 2025, FCF generation will broadly be positive. If confidence in the US economy comes back in 2025 and companies open up their wallets, backed by falling interest rates, the tide should turn for S4 next year. That's my optimistic take om how I see S4's business propsects playing out in 2025.

We're circa/sub £200m valuation at this time and how much worse can it really get? We're nearly scraping the bottom me thinks. On the flip side, if business does get better next year, we really could be off to the races. I'm betting on the latter...

But hey ho, that's what makes the market!!

Jcj07 - I know you bring this point up often on this board and that is the unfortunate reality that tech giants' spent on marketing services as well as technology services hasn't come back even though the economy has held up relatively well. I'm sure MS hoped that would come back and was holding out for that to come through in 2024, but not to be. S4 focus on technology clients is coming back to bite it in 2024, and that's why S4 is carrying out these 'largish' job cuts in the past few weeks. I suppose they'll quantify these tomorrow.

I don't expect to see updates on revenue pick up in Q4, but guidance on margins and the forecast revenue for Q4, and if they ramp up even a bit, will be welcome. Maybe we'll see a Y-O-Y small growth in Q4, and if that materialises, that's welcome. For S4 in particular, macro is still a factor in that tech spending is still shiite - there's no sugar coating that.

Good luck for tomorrow!!

One or two posts on the Instagram channel refer to getting them to profitability, presumably on a non-GAAP basis, by the end of this year, and this is a good start in that direction. I wouldn't wish hardship on employees, but the bottom-line is that the owner managers (MS/Wes et all) have no option but to do this. It's not certain if Big tech will come back and spend on large tech programmes and hence this cull is in order. I'm not sure if they'll cut down by another 1000 to 1500 employees from the current 7500 levels, but it looks like the goal is to get employee costs down to 60% of the revenue levels, which is circa 5 to 10% lower than industry norms - that sets us up well even in the event that tech ad spend doesn't come back in 2025, and if does, we'll be off to the races.

That's the upside of these HC chops since October.

If Numpty Trumpty implements his blanket tariff policy, that won't be good for the US economy. Maybe he won't implement that policy if does win, but knowing that in his 2 ounce brain he thinks/believes that Tariffs are a tax on China/Europe and not a tax on US importers which they'll likely pass on to their consumers, i.e. ordinary people, it's likely that he'll put these on.

If we get into a global trade war, as precipitated by the Smoot Hawley act during the Great Depression of the 1930s, then all bets are off. It's better for the globe if an adult gets into the WH and not the Orange man-child.

5 days before the big reveal!!!

"Unfortunately, alphabet beating revenues don't mean much is respect to S4"

THis is correct. It's when the likes of GOOG and META open their marketing spending wallets in turn, that's when we'll see a upturn in our revenues. 2025, it is, IMO. Election outcome incoming and if numpty trumpty is out, the tech giants can go back to spending like its 2021/22 - Lol. Maybe an initial small increase in spend in 2025 is likely - 2021/22 level spend by these tech giants - unsure when that'll come back.

S4 will need to and highly likely will pivot more to non-tech clients from 25 onwards!!!

Spot on, Moody. And that lack of liquidity providing little to no sustainable bounce off the lows is no conspiracy at all. Sellers/shorts rule the roost and the only way to turn around a SP is when cold hard facts show up in reports - the concept of improving fundamentals reflecting in advance on a SP doesn't really happen on our remarkable stock market.

And then you have the likes of lse2000 speaking out his backside as he normally does and imagines that he's now mastered the art of fundamental analysis. ROFL. He'll be back in the trenches once US tech spending normalises in 2025 - all imo.

"In Britain,Reach plc digital revenue increases are relevant as it means companies in Britain are starting to spend again of digital advertising...Asia is more problematic though."

Again, Britain and Asia are but small pebbles in S4 revenue pond and are all but irrelevant from an S4 viewpoint. All I know is that I'll never rely on you to perform fundamental analysis on a company that I want to invest in. ;-) With respect to stock trading - given that you're always a seller, that strategy almost certainly will not work when fundamentals for S4 turns around in 2025 (my current take). However, I'm sure your current trade will net you a decent packet.

Glow - IMO, it's a pointless comparison trying to tie Reach PLC's increased digital advertising revenues to S4's. Different geographies (80% US revenues for S4) /client profiles is what makes it pointless.

S4's Tech clients will not open their wallets until the election is over and they know what their possible regulatory burdens would look like - hence, it's a 2025 spend recovery story for me, with possibly green shoots noted towards the end of this year.

Isn't a better reason for why S4 is now a buy in your books is because you're now trading long after talking down S4 for ages? Just saying...

The US stock markets aren't closed today.

@Poker - counds about right to me.

Some of the beaten down stocks/sectors (Solar as an example) have made a good jump last week as the rally in the US is broadening out ahead of any seen improvment in business/earnings. And then you have the LSE where every stock, unless they actually show revenue/profitability upswings, are dogs!!! There's no concept of front running on these shallow markets. We could very well go to all-time lows now, but I'm holding and will add if the decline takes us a fair bit lower from here.

Many of us can't or won't be bothered to read up HY reports or ARs, but we still are LTHs. That's how we roll!!!

Oink, Oink - Stop looking for truffles in a fresh field of shiite!!