Member Info for kularatnam

Market has been nasty on S4 in the recent past despite certain of its fundamental metrics improving in 2024 (2023) - EPS 5.2p (4.4),Free Cash Flow £38mn( 13.8), Net Debt £143mn (181) and only the negative thing being the top line. Let us see what is in store.

First half report was prepared in almost at the end the year and therefore there is a reasonbale chance of the forecasts given being met. Key among them are the Net Revenue which is expected to be lower by mid single digits ( I assume 5%)and EBITDA to be similar to that of 2024.

Putting some numbers to these forecasts ,Net Revenue for the year comes in at £717mn giveing a 2nd half figure of £389mn which is better by £10 m over 2024 2nd half.

EBITDA would be £88mn , same as 2024 and the 2nd half figure being £67mn . It gives 2nd half EBITDA margin of 17.2% , closer to the 20% SMS aiming for.

Net Debt position of 100 to 140 is very positive reflecting huge debt reduction and cash inflow, may be the result of better operational performance and some other things/s. So fundamental continue to improve.

I would love a company with Top line of £500mn & a 20% margin than a company of £1bn and 10% margin. Very soon 20 p on this stock is going to be a thing of the past.

I stand to be corrected.

GLA

GLA

Auson, thanks.

Gives a Net debt range of £100 to £140.An analyst asked as to why such a big gap in the range, when we are already closer to the year end, only 3.5 months left. I didnt get the reponse satisfactory.

We are already in £145mn and to go down to the lower end of £100 mn, something massive ( inflow) has to happen. Or even the upper end of £140 reflects a £5mn reduction and that is also remarkably positive considering huge restructuring that is going to happen/ing including mass lay off of staff.

Anyone has any idea. Thanks.

Will have an impact here ???

NigeCo, thanks for that clarification.

Why there are no purchases of shares by directors at these ridiculously low prices? There are two new comers and to comply with the best practices at least they should have made some purchases. Or is there something - some form of corporate action - preventing them from doing so. Coming days will tell.

In the Campaign Asia article what he says on Media buying

"The third focus is media planning and buying. “Our industry is still largely manual or semi-automatic. In the algorithmic age, that doesn’t work. We’re working with Google and Meta on Advantage Plus and Performance Max to move media buying to algorithmic models, with agencies validating platform outputs,” he said.

Now see what has come out of Publicis' Epsilon

"An ADWEEK investigation found that media buyers at WPP, IPG, Dentsu, Havas, several independents, and one Fortune 500 brand unknowingly bought ads through Publicis Groupe’s Epsilon SSP via reseller supply paths. So while they thought they were buying through a given SSP, like Magnite or PubMatic, the purchased inventory had passed through Epsilon SSP. This means that dollars and data were in some cases sent to Publicis, a direct competitor. "

I dont know the implications of this.

The link is below

https://www.adweek.com/programmatic/the-ssp-in-the-shadows/

GLA

Does it mean 16% you growth in April. That would be fantastic.

Last year soon after TU on 22nd Jan 2024, share buy back was announced on the 26th Jan 2024 in a sum of £2.6mn. At that time Net Debt was £181mn.

GLA

Jonny & Newbie - Thanks for your observations. We will hope things will improve at least after the FY results in March. GLA.

As to why and how the SP is being kept or langusing at these ridiculously low levels - having dropped 10% since TU - despite an excellant update on trading. No wonder companies and CEOs are abandoning LSE. What is the incentive or appreciation to a CEO haveing performed well , when you see the prices like this.

Some fundaments based on the TU. H2 revenue would be around £895+ and an EBITDA of £ 195 . On an annualised basis ,2025 could record a revenue of £1.8bn and EBITDA of £ 375 to £400 mn, which would result in the begining of debt reduction in excess of £200mn.

With these performance trends I cant understand how the SP kept so low.

Https://inews.co.uk/news/business/treasury-car-finance-credit-crunch-3351670?srsltid=AfmBOopsFGvSqkVihD3nPU0IseKIOoH06QWBhzLLEdyZ9xb_IpVr09Uj

Will S4S ventures ever be absorbed within S4 Capital??

Appears to be having a number of exiting portfolio companies

https://thetimesmag.com/2024/10/17/cambri-secures-e8-million-to-transform-market-research-with-ai-insights/

https://www.s4sventures.com/

@Meconopsis "Barclays are arguing that this is regulatory overreach; the FCA is seeking to (effectively) fine companies for something that was entirely legal."

See what heads of FCA & PRA saying about red tapes and over regulations - preach and don't practice - ridiculous.

https://bmmagazine.co.uk/in-business/red-tape-risks-turning-city-into-graveyard-warns-bank-of-england-official/#:~:text=Excessive%20regulation%20could%20turn%20the,(PRA)%2C%20has%20warned.

Https://uk.finance.yahoo.com/news/barclays-challenges-motor-finance-ruling-104459724.html

Https://blog.adobe.com/en/publish/2024/10/15/announcing-2024-adobe-firefly-partner-award-winner-runners-up

Thank you Meconopsis for comments on my note and also for your add ons. Very much appreciated.

I read your views on NAV, very interesting and validates how the share price under values CBG. No question , it is all to do with FCA uncertainty, not with the operational performance because it is doing strongly.

I missed a point in the calculation it should read as follows -

100000/4*17*44%*1500. & the amount is £280 mn.

The share price now is an absolute bargain.

Article specifically on CBG. With the info from the article and some assumptions , my estimate of the compensation is £250 mn , which matches with some projections of analysts/brokers. Number of customers at a time - 100000 - divided by the duration of contract ( 4 years ) * 17 years * average compensation of £1600. CBG has already secured and have in reserve much more funding than that and it can comfortably wade through this crisis.

Another plus point is the time factor. FCA saga will not be over soon and knowing the way these issues are handled , I reckon it will be another 3 to 4 years to end and the compensation outgoings will be well spread.. That means it will not face any sudden financial shocks , but instead it will strengthen its position with the cumulation of YOY profits, £150mn + and with less or no dividends.

IMHO. GLA

https://www.lawplus.co.uk/pcp/how-to-bring-a-close-brothers-car-finance-claim/

Anyone is aware how this compensation , if at all awarded, will be treated for tax purposes, whether it is an allowable expenditure ? A reply would be welcome. Thanks.