Member Info for kularatnam

JG68, What they said was that out of the £160 mn savings £50 mn will go towards reinvestment.

The Cash Outflow of £70 to £90 in 2023 is something not unusual in the first year of transformation. Bulk of which are One Off and capital expenditures. Main one is redundancy payments listed @ £51mn ( £6mn in 2023), number of colleagues is now 41,000 as opposed to 43,000 reported in March. Then we have the payments to technology providers - AWS, Servicenow, salesfore etc - for the highly enhanced capabilities and they don't come cheap. Initial year a higher figure . Then what about the Capital Market presentation itself. It is also not a cheap exercise - apart from the additional time spent and efforts made internally, consulting charges of Boston Consulting , OC&C etc - top rated consultancies. So the Cash Outflow is an obvious outcome.

What we are now focused is the future. First evidence of AH & Co performance will be known and come in August. When the market sees execution of plans SP will explode. All depends on the credibility of the management. IMHO. GLA.

@slarti_bartfast, hope the price targets you mentioned materialize. I also feel 14p is the bottom and will gradually move upwards till 2nd August and then explode , provided the savings given in the presentation is secured in numbers in the half year accounts. GLA

In the Q&A session, for the last question - what way he (AH) thinks the transformation presented is different from what JL did - AH says the previous one was Restructuring and his is Digital Transformation for the next decade. He also delved into the complexities JL faced and that he has simplified into Two Divisions , from the eleven odd, strengthened the Balance Sheet. Also times have changed and the technologies of today were not there etc.( we of course know what destruction JL did).

But the point I am making is about the character of the man. He is so mature and diplomatic and very careful not to run down or hurt the feelings of JL or people - colleagues, subordinates or business associates - who would be still closer or loyal to JL. Definitely he this will be admired and a good thing. IMHO.

Thank you, Kipper9

In the presentation, one of the targets set for medium term is EBIT of 6% to 8%. I am not sure why this metric was used instead of the usual EBITDA. Anyway EBIT target is very impressive. Using this range for 2023 numbers , the EBIT would have been in the range of £169 to £225 mn. and the EBITDA £ 273 to £329. EBITDA represents Cash generation before charging Interest & Tax. This is huge and that may be the reason why they are confident of not going for any capital raise and are able to meet the funding requirements for capital projects for developments.

BTW the actual EBIT for 2023 was £110 mn. or 4 %. The target is 50 % to 100% higher. IMHO.

GLA

I too agree, excellent presentation, except that it is for INVESTORS (mid to long term) and not for TRADERS. That explains the price action. Selling will continue till get exhausted. Eventually investors will get hold of the dynamics. GLA

Roughly 2%. SMS has to come out with another "buy back" .

Shuts down.

https://videoweek.com/2024/06/12/oracle-quietly-exits-the-advertising-business/

Any thoughts on this. Looks good for specialist ad agencies. GLA

The most important and positive message from the RNS is the reiteration of the 2024 guidance , improvement in EBIT and the "NO" to any hint on capital raise. CEO is confident in fund the required investment in new technologies and transformation initiatives with the savings to be made.

In the short term the share price will depend much on todays presentation - how the market assess the capability of AH to deliver on his strategies . I am confident and expect the SP to be north of 16p by the week end. GLA

Thank you Multiplier7 for those inputs.

Hopefully these new rules become effective July /August and with the fundamentals of S4 stabilizing and improving - half year results - we are in for some good times. GLA

Https://www.digitaling.com/articles/1040885.html

Multiplier7, thanks for the information.

What kind of impact this will have on S4 & THG. Please give some more details. Thanks.

MSN, Thanks for the link.

SMS, as is the case with any other expert speakers gives the Pros and Cons of AI and leave it to the audience /observers to make their own conclusions.

He says time spent on traditional agency work will be less , meaning lower billings as it will be based on output/assets produced. This will evolve and the agencies will have to change their strategies in such a way that they achieve targeted profits as the cost base and topline revenue would be lower.

Then the second area “which is the complete reverse and is super super important,” is hyper-personalisation." Super Super Important -I take it as very positive. GLA

Https://www.hollywoodreporter.com/business/business-news/2024-global-advertising-forecast-groupm-trillion-2025-1235917863/

"The increases in the total revenue for these years are largely due to revised forecasts for China, which we now estimate will record $199.4 billion in 2024 versus the $148.2 we wrote in our last forecast,” the firm explained. “These gains are primarily within digital pure-play and out-of-home advertising."

GLA

Something to laugh at

https://www.linkedin.com/posts/michaellitman_ai-mediamonks-activity-7185662840001720321-MkAn/

Https://www.celarity.com/blog/3-trends-fueling-marketing-agency-growth/

Wesley Ter Haar has been misquoted on this board to suit certain line of thinking. What he said was

"Media buying among 'first areas to go' with rise of AI, says MediaMonks co-founder

Wesley ter Haar likens media buyers to “early 2000s travel agents”.

He was not refereeing to entire Ad industry, only the Media buying.

Ad agencies like S4 /Media Monks offer variety of services and they are specialists /experts on those areas and Media Monks is the Best of the lot, evidenced by being awarded the AI Ad Agent for 2023. Individual companies - SMEs or large corporations - cant have the luxury of possessing all that can be offered by specialist AD agencies. In my view Ad Agencies will thrive with the disruption of AI or any other technological developments.

GoCPI, " Foresight isn't this market's competency"

Well said & very true.

Thank you GoCPI for those detailed analysis of wage cost.

Going by that roughly we might have a positive impact on EBITDA, FCF & P&L of £ 34mn( 671*5%). That is very substantial, ten times of that is £340mn in S4 valuation.IMHO.