Member Info for GoCPI

RWD - knowing that it's not T mobile US, the only other 'biggest' telco is AT&T (biggest by revenue globally), although I'd be surprised if they really had an NDA against giving their name away. But who knows?

There's an interesting snippet in the news link from WolfofLSE.

"Could you outline S4 Capital’s current revenue profile and client portfolio?

We generate approximately $1 billion in annual revenue, with nearly half of that coming from technology companies. Our largest relationship is with Alphabet (Google). Our second-largest is with the world’s biggest telecom company, which we can’t name due to NDA restrictions. Additionally, we collaborate with prominent companies such as Meta, Amazon, T-Mobile, Disney, Netflix, General Motors, BMW, and General Mills International."

The second biggest 'customer' is the world's largest telco and is covered under an NDA. That smells like China Telecom to me. T-Mobile US is already our customer and is the world's biggest telco by market cap. I have no idea if they've been a customer for us for a while, but is an interesting thing if we're getting net incremental revenues from them from this FY or next, and that isn't yet in the market's sights. There are 10 whoppers if you include this 'NDA bound customer' and that to me sounds like a new addition.

Thoughts anyone?

@Auson - Trump's tariffs are doing wonders to the US economy as can be noted from these booming employment stats. MAGA is indeed the recipe for economic prosperity.

P.S: added more today. Good weekend longs, don't let Pointless2000 get to you!! ;-)

I never once realised that I was a born psychic!! ROFL.

We'll have MildLaddie come along shortly with a new thread - 'I'm out. THank you buyers. S4 is going under soon'.

"Let’s hope the Technology Services division finally has its house in order after a rough patch. If the team can consistently deliver AI-driven solutions to real client challenges, this arm could become a genuine growth driver and restore some much needed profitability."

Wolf - i think this growth will be more of a 2026 story, but from H2 onwards revenue comparables get a lot more favourable for the tech services division, but the size of this division is small in the grand scheme of things and a change in business outlook here can be noticed from similar tech services providing competitors. It's us providing end to end data driven tech solutions to drive digital marketing at scale for a lower cost - that's what would set us apart from the less tech focused big boys like WPP and Dentsu.

RWD -- No, it is not contradictory. What I'm saying is that the shallowness of the LSE is what makes the kind of valuation we're seeing now with S4, possible.. And that too without a counter-balancing price discovery mechanism that's based on accepted valuation metrics such as FCF Yield %/EBITDA-EV multiple. At a 25+% FCF yield and where distressed debt isn't an issue, only the greatest stock market on the planet will value a firm like where it is here in S4's case. And from my view point, I'll continue to add at these distressed level valuations offered up here.

And I'm aware that it could well stay at these levels OR go lower if the broader market sells off, however without a counter-balance through a much wider set of participants, the price can continue to get 'shellacked'. IMO, the fact that we're valued here on a distressed/bankruptcy type valuation is unreal and I see this as an opportunity. That is my view based on my view of the risk/reward profile and I accept that it is not everyone's cuppa. To each their own and I continue to practice what I preach - that is to keep adding here.

"Martin needs to show revenue has stabilised at a minimum and margin growth.

This share will continue to get sand kicked in its face until he does so. Valuation metrics are out of the window until the market can see a future without quarter after quarter of downward revenue revisions"

RWD - IMO, what's getting lost in this narrative above is that the valuation will only get better only when there an actual revenue growth is seen by the market. THat's complete BS if I can out it bluntly and is only but a reflection of a completely shallow market which can't see the woods for the trees. Even a quarter efficient market should be able to digest the fact that a company is being valued at ludicrously distressed levels when there's not a need or basis to. This is the gripe that a few of us on here see.

I have countless examples of shares that I have invested in on the NYSE where there is no revenue growth turn yet but initial indications of green shoots are to be seen (still negative growth this year) and the stock prices have reacted positively already with more than 100% gains in the past few months. THat to me is a sign of a balanced market with the needed depth. Tickers like KSS and JELD are examples of out of favour stocks in out of favour sectors that could just be on the verge of a turnaround and have yielded >= 100% jumps from all-time lows this year. And their financials are cr*ap. And we're still scraping the bottom even with ludicrouly high FCF% metrics. But good old Martin doesn't want to rectify this humungous mistake and this egregious error is allowed to fester.

This is more the issue for me and coupled with a circa 5% yield is why I'm taking money from my other profitable investments and buying more here. THis is not a pump on this board but my conviction about the crass undervaluation in S4's valuation on the LSE. And I know that this will come good one day, pretty soon IMO. Even without Martin wanting to change the valuation paradigm.

One final point on the staff costs topic. WPP's staff cost to net revenues was 65% in 2024, and Publicis' ratio was 66% in 2024. Compare that ours at 77% in 2024 and we know we should be at least a good 10% lower from the £580m cost we were at last year.

It's good that we make this push ahead either ahead of any turn in the business or even in the event of no turn for the next year or so.

I have a different spin on the layoffs and that it's a positive from balancing revenues vs costs. High cost and under-utilised employees in Europe are being let go and low cost resources in South America are still being hired. Just look at Monks Colombia linked-in page for some job openings there. The industry norm is circa 65% labour cost versus revenues and we're a good 10 to 15 % points higher and that needs to be rectified - hence the S4 spokespeople calling this a strategic reduction/realignment.

Q4 YOY revenue growth is still on the cards, IMO.

Ahh, MildLaddie got in for a lower price than NoPlaster. It's a market that keeps giving!!

Buybacks on Sept 15th? They're coming, IMO.

We had already trimmed 200 since the end of H1 to 6800 from 7000, and it looks like more high-cost non-billable resources will be prime targets, sadly for them. Well, NI costs have gone up more in the UK since April and it won't be a suprise if cuts are aplenty in the UK, particularly since the business here is probably shiite in a no-growth economy.

I suppose it isn't a surprise that the market keeps putting us down at every chance, but a turn in revenues in the US in Q4 followed by more job cuts to get us to the 65% cost to revenues mix is exactly where we need to be, and we're at circa 75% or a bit higher, from memory. I don't expect fireworks next month - just plain news of cost realignment to revs. And an update on revenue trends.

@Auson - not to come across as pontificating, but the more we engage with the likes of POintless2000, the more they're empowered. The MO of these shorting boiler room operations is the same - collectively get together, spread constant negative tripe with the expectation that traders lose patience OR some holders on here start to lighten holdings. Ignore their goading posts as there's nothing to be gained from any engagement with this lot.

P.S: Added more yesterdya dn today!! I know I'm over-exposed but my views stand firm.

I like the odds here and added more today after thinking we might not get a chance in the 22s again.

Here's an important bit of info from the article..

"and we have already moved forward from generative content creation — where AI responds to the instructions it is given — to agentic content, created by AI with minimal human involvement. Our Puma commercial in March this year led the way, training a team of AI agents to create the advertising from beginning to end, designing preliminary concepts, writing scripts, generating high quality video and pulling it all together in a finished commercial. We’re doing the same for GM, Google Pixel and a yet to be announced major global package goods company"

Have we secured a new global package goods company as a customer? That's how it reads to me and isn't that nice? I'm not saying that they're a whopper, but it's good to get traction in that AI driven contact creation area!!!

Here it is, @Longfell.

https://archive.ph/Osm3P

Sounds about right, Verney. Here's an archived link to the Times article. https://archive.ph/zFyhA

Stagwell has a few positives going for it and I suppose S4 would've been complementary for their business. Revenues are still growing, EBITDA margins are at 15% - it's Penn's hubris versus Martin's I suppose. Penn's firm is growing and he's doing a bit of chest thumping that we're in a worst situation than last year and that's a known, however we're still pretty from a financial viewpoint - way more so than Stagwell.

Their debt levels are rising even with a higher CF from Ops and interest levels are way higher - buybacks to blame there, but also lo levels of cash conversion. When we turn around revenues in Q4, our EBITDA margins should rise more and start to normalise closer to 15% levels, aided by previous and additional cost cuts. Could we start to look at buybacks as well - I won't be surprised if SMS announces that with the H1 results, particularly if the revenue outlook becomes a bit less murky. We'll see.

"I notice aim didn’t mention the increased short, on 21st, which he would of done, if he wasn’t now long 🤣"

Of course she wouldn't - doesn't suit her current pumping agenda as she's now stuck with CPI trading at a lower price point than when she got in.. ;-) AimLess' agenda is ever so transparent, but as long she dredges up positive articles/posts correct analysis based on facts, that isn't an unwelcome situation. I/we should look forward to regular bidstats win updates and other tidbits that may be a touch painful to find. :-)

AimLess - positional posting turncoat. Oh well, I suppose 'glad' to have you onboard to now keep pumping this until you get your trading profits and sell out, and then get back to start talking doom and gloom again.

No doubt the CC business is the problem child and is responsible for negative revenue growth overall along with pulling down group margins. There are a few bits you can pick up from the 24 AR and the HY 25 reports.

- Revenue decline seems to be levelling out and per the guide this month, a mid-teen revs decline for FY 25 indicates the lowest HY rev reduction for a quite a few HYs yet. HY1 24 was £345m, dropping to £305m in HY2 24, dropped further to £277m in HY1 25 and at a circa 16% FY 25 drop, we're looking at a £269m rev in HY2 25 - which is a significant cooling of revenue decline. And we're possibly close to the low-point in HY revenues

- Cost reduction phasing to be better in H2 and we should see positive Op Margin in the second half, even with lowered revenues - this was stated in the HY report. I suspect that is what the management sees coming through.

- More UK labour reduction to cut down on NI costs (thank you Labour for that genius move) should aid op margins - that's really the only way to go and natural attrition should contribute to this goal

If public sector continues with its trajectory and CC only even sits still in 2026 ( I expect a marginal revenue increase with a a circa 3 to 5% op margin), then we'll have our first YOY revenue increase in FY 2026. And an op margin close to the 6% low point target. We should already see this margin closer to 5% in HY2 2025. This is what the management is seeing and them being sanguine about FCF from 2026 onwards.

Fix CC and we'll see a healthier CPI - as simple as that.

"I've always been of the opinion that a day trader may well make quite a few small successful trades. But at some point sells up when a share price breaks out of its trading range, only to end up kicking himself, unless he panic buys, and buys the shares back at a higher price. While the long term investor reaps the rewards over a longer period. Each to their own. I like to think that I'm an investor not a gambler."

Spot on, NigeCo. For far too long S4's been kicking around in a range or subject to wild swings down on little volume. And at the mercy of half a penny pinchers. Maybe today's J-hole news is a sign for US corporates that they can't afford to sit on their hands for too long and that they should crack on with their growth plans and start investing!!! Still a way to go before break even here for me, but I like the chances of a very good rerate in the coming months.

And I'm not a know-it-all trader!!