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Its certainly an interesting time for reflection and analysis. Quite a few theories of going around, I noticed that Laura from Needham raised the SSP vs DSP as one explanation of why both PUBM and MGNI got slated. Personally, my confidence for TRMR going into this earnings is not shaken from what I've seen.
Gdog, it wasn't just guidance - they didn't have good quarters, in the case of MGNI and PUBM, they pushed Mediamath as one excuse, and the macro environment was also not seen as conducive.
Then we had DSP, PERI and TTD which had better quarters. TTD was arguably always going to have a SP fall whatever it did, as its arguably priced for perfection presently. Neither, TTD or PERI have had any correlation with TRMR in the recent past however DSP has, I believe, the closest correlation to TRMR in the past 18 months or so. Pretty much the two have been providing similar views of the macro ad environment over that period so interesting for DSP to be rather more positive in its latest earnings.
Gdog, you mentioned on a previous post that you didn't hear anything on the conference call that was particularly new. I know you are thorough so I was intrigued. I concluded almost the opposite. Sure its not certain and is still cloudy - but when did we last hear a figure presented to the CFO (two thirds thru the quarter) which by implication he confirmed they were on target for - okay the above was not clear cut but still its not something I've come across in countless calls previously - have you? The CFO didn't attempt to temper expectations even with analyst encouragement - 40-60 split would have been easy to agree and would soften Q2 expectations with but he mentioned a 45 - 55 as another possibility.
Even more interestingly is that if they meet the 92.4m then the 400m is perhaps more than achievable. And whilst TRMR is down 37% in the 52 weeks, PUBM is down 11% and TTD is up 35%.; yet there would be a strong case that TRMR would at 400m have had the best year assuming the others perform as guided.
Yes, we've been disappointed previously but I think its important not to be swayed unduly by the past particularly. I know you've been buying in the recent past and see many of same things as I do so just interested to know what turned you off from concluding the same this time.
Arthur, TRMR has certainly tested our patience at times however this may turn out to be beneficial. I've been buying for the last few months and right down at the 2GBP low. Should the recovery happen in the next quarters results then the potential for a serious re-rate is good. Although now it would have been nice to have seen a straight line up or even a level one, at some point in the future I may look back and consider it lucky that I had the opportunity to buy when it was seriously low. I'm hoping that the patience will pay out in the future.
The Q & A from the conf. call was most interesting. Couple of bits worth consideration. When the CFO was asked about the broker consensus of 92m for Q2, he was given plenty of space (perhaps encouragement) to row back from the 400m end of year target. Given the Q1 numbers that would have seemed sensible however ...
Some quotes include:
"we think or we assume we will go much better numbers than we did in Q1";
"No, I think we are in the line of those numbers"
"No, we are not stepping down from here"
"We are seeing the the first signs of the fruits of that hard work in the past six months"
With two thirds of Q2 over already we can assume that their grasp of Q2 is pretty good. There is a peppering of quotes in the call about ... since early March things improved, May stronger again than April.
From my notes, it was around six months after the The Unruly acquisition that we saw the SP benefits come thru. The next quarter could be very interesting if they show a turnaround. When you compare TRMR pricing fundamentals against Pubm, you realize just how undervalued TRMR is even in a lowly priced ad-tec market.
Brimach, I wasn't able to ascertain much of a timeline from the latest docs however having gone thru relevant docs for an hour or so, it did appear apparent that Alonso / LG are being made to provide documents and testimony that they have attempted to frustrate since the start so perhaps that may be a sufficient lever for them to start seeking a settlement.
So my question was - out of all the public traded ad-tecs which would be the fastest growing over a three year period in terms of % on revenue ex-TAC (or the nearest equivalent if they don't publish ex-TAC) assuming TRMR makes its potentially conservative target of 400M and TTD meets its 20%?
Adding each year of growth together for the last 2 and guided current, TRMR would beat TTD by about 0.4%. That sounds crazy when you look at their respective presentations and fundamentals. One's clearly very good at pitching its biz and the other is terrible.
Havealot, Amobee was loss making when acquired so it's going to dilute down trmr's margin during 2023. The full stack model and a focus on efficiencies should bring it back to sector leading in time.
Gdog, you wrote regarding guidance: "I think they're shooting from the hip."
I agree, however I also believe the downgrade to 400M was an attempt to regain the initiative. Consider the difference in perception and trust if they actually hit 420M having reset expectations to 400M, rather than hitting 420M with a target of 450M. The first , they will be ahead of guidance for 4 quarters and the later; missing for 4 more.
Their previous calculations had led them to expect 460m but that demands a 61% increase in programmatic ex TAC (albeit mostly coming from Amobee); they reconsidered this figure in light of their competitor's single digit increases and the recent softness. Even the 400m requires a 39% increase in programmatic. I believe, it was the comparison with their competitors, and having finally cottoned onto the game of setting expectations low and then beating them - albeit with terrible management of expectation setting at the outset.
You mentioned company fundamentals, that is a really fascinating area right now. Assume TRMR hits its 400m target, I believe it may beat it but lets stick with a hit - which two ad-tec stocks, out of all the public traded, would be the fastest growing over a three year period in terms of %, for revenue ex-TAC (or the nearest equivalent if they don't publish ex-TAC)?
I believe its fairly certain that the delisting is a cynical ploy to effectively dupe the small PIs, prior to positive news-flow which would send the SP significantly northwards. The much awaited pipeline is any time now and with that now in sight, clearly its time to significantly raise production - no point doing it previously as there would probably have been selling the increased quantity.
So what can us small PIs do about this? Well I'd like to hold on but there are hurdles to consider.
1. I need to get it out of my SIPP. I have a plan on how I can do this - anyone else in this position?
2. I'd like to get the shares into an account that is perhaps geared for this delisted share - anyone have any suggestions?
3. I'd like to obtain a share certificate but I think GEEC will not facilitate this?
4. I'd like to understand how many of us are in the same situation - and how many shares are we talking about? I have a 180,000 GDRs.
So who else is out there?
Yes, I'll let you know if I do get a response. Does anyone know any brokers that deal with OTC, my thought is to buy mine out of my SIPP. I'd do this before the deadline so they end up in a dealing account but I'd like to get a broker who will be able to handle the delisted shares.
Has anyone tried and had any luck with the email address provided in the RNS which is supposed to provide further information?
Gdog, you mention a midge of growth being desirable.
I've had some thoughts on what we may expect this year.
At 46:50 in the Q&A, the analyst asks what I believe is the most insightful question. The question is why change guidance?
The answer given is:
a. soft Dec, Jan, and early Feb and
b. because its pro-rata +5% which is in line with guidance provided by others.
There are serious challenges with these statements and they simply cannot both be true.
When purchased Amobee revenue ex TAC were 150m, add TRMR at 300m(ish) and you have the 450m. Add the 5% organic and you move past the 460m and with some cross selling you arrive at 500m which was also announced at acquisition closing. These considerations, I believe were the basis for the original estimates and they at least had some logic.
Ofer and co. again re-iterated pro-rata plus 5% in 2023 on the call. This is in line with Viant and Pubmatic which also expressed that softness in Q4/Q1 but they also forecast 3.5 and 8.5% growth in 23 respectively. But this isn't consistent with the the 400m new guidance.
My take: the new guidance is NOT linked to a sound method of calculation as their previous guidance was. I have found a mathematical means to get to 400m. If you take 2022 Q1 and Q2 figures and apply to them the % change in programmatic and performance which occurred in Q4 23, then you will get to 42% (the H1/H2 spilt also mentioned in the call) of the 400m.
So in summary, they are taking the softness in Dec and Jan and applying it across the year which is NOT the pro-rata +5% which they also claim.
Before I move on ... what's your thoughts on the above logic?
Gdog, you are not alone in doubling down on this investment, nor the only one that has been poring over all the recordings, slides, and broker thinking. There seems to be some pretty key things that don't seem to be getting the attention they would appear to deserve - often I feel like I'm in a very exclusive club in seeing these.
The extent of current SP weakness isn't rational in my mind and perhaps makes this a real stand out opportunity; in a market where there seems to be a lot of very good opportunities if you know where to look.
Is CTV growth the main driver behind your thinking?
Jon.
One question I find intriguing is why the 9.50 UKP figure was disclosed this time around, a year later. Not an accidental addition I suspect. If a party was attempting to ensure a low offer wasn't accepted then they may disclose this figure at this point; I don't see another reason for trotting this gem out now. If this is the case then it informs us that party(s) are indeed putting forward numbers and we may be closer than on previous occasions. I for one believe this is a terrible time for a sale, at least it is for PIs; as I have taken a very different view to most regarding the Q4 results and outlook.
Hi TroytoTiber
I appreciate your updates on a generally neglected share. I bought back in early 2021 and the lack of news-flow has tested my patience at times. However the fundamentals and promise still look as good now as when I first bought. Fair to say my other oil/gas shares have generally performed better over the past year but I'm holding out for the pipeline and the clear articulation of the expansion plans.
Last year the Q4 announcement was on the 10/02 and results on 24/02. So from tomorrow, two weeks later.
Unless the announcement is late but the results don't follow the 2 week gap then we are going to be well out of sync with the other players - unusually so even for TRMR.
Could they be delaying to coincide with an important announcement, there are no shortage of possibilities at present:
1. I'm sure we can have a more than educated guess on the providence of the Rebekah Brooks story linked with a potential sale facilitated by Goldman Sachs back in Dec. It's still ongoing presumably.
2. LG settlement.
3. Big deal with one of the tier one CTV content providers.
4. Re-branding details - but that was meant to be mid year.
Is an announcement a possible reason for holding back results? I don't think Amobee is the reason, as they integrated Amobee results in Q3 without being particularly late.
Hi Gdog, last year the announcement was on the 10/02 and results on 24/02.
So a week later and counting.
We are normally last(ish) but often still around the same time as the others however this time there's going to be a gap, unless the announcement is late but the results don't follow the 2 week gap.
The other aspect to this is that the Q3 results were held on the 14-11-22, with the Q4 guidance changed so they had 6 weeks of Q4 numbers by the time guidance changed - and you would think they also had good sight of at least the next couple of weeks so 8 weeks of the 12 should have been either known, or pretty well known. I guess you know where I'm going with that track.
The reason I didn't invest in perion significantly a couple years ago was because of the contractual dependence it had with Microsoft, ironically this side of its business seems to have done well during this time. The question is whether Bing 's coming success will help or hinder Perion. There is little doubt in my mind that Bing will a significant increase in market share with chatgpt integrated, however this will bring significant and renewed focus on Bing from Microsoft. Could this new scrutiny make Microsoft reconsider perions role? It's possible, no, as Bing stops being a relative failure and success brings greater revenue and hence a rethink from Microsoft?
Gdog, nice to have an idea of your investments and hence your thinking. We share many of the same however although trmr is my largest, the others in my adtech portfolio are significantly smaller. However I'm awaiting an appropriate time to transition out of my oil companies into more adtec. I think we are close; don't want to leave it too late however too early might prove expensive too.