Member Info for Phrontist

It is worth noting, the ambitious S4 business is making a good contribution to the UK GDP, employment, HMRC revenue, exports, economic growth, low carbon business.
Ultimately everyone in the UK has some benefit from bold and ambitious companies like S4.
Many (most) companies have suffered a grim 2022 H1 due to Brexit, COVID, international differences, Russia unprovoked war on Ukraine, the poorest country in Europe.
Also S4 have pointed out, H1 involved work and investment that should enable H2 to produce larger and stronger financials.
I would agree that SMS is one of the most able and experienced business managers, not just in the UK, but worldwide.
Phrontist

Should be passing 2p, then soon passing 3p
By and large, a strong well focused business in a growing global market.
Can anyone suggest a better share on the UK Stock Exchange?
Phrontist

Robina, Simply Wall Street means a lot based on published Accounts.
But not everything.
There could be Company withheld relevant information, or changes in external economic situation, for example.
The recent S4 Profit forecast reduction was new information with no prior warning.
The SP reduction is in part because of the forecast reduction. But I suspect the SP reduction is more because of a substantial change with no prior warning.
I advised weeks ago that late accounts are hand in hand with poor management control.
I did not actually believe this for S4 but sadly my comment had some truth in it.
Though I am baffled why with such an experienced and determined management team should fail to notice such a problem so late in the problem development.
A Chairman should not be so emotionally involved or operationally involved in running the business. He is meant to manage and mentor the CEO and BoD, ensuring their work is full and on target.
Still however, the business is doing extremely well IMHO and is becoming a major positive force in its chosen field.
Phrontist

I agree.
Two of the most important figures are great:
Massive growth in Sales (invoices) with Orders/Contracts expected to continue Sales growth through next 12 months and beyond.
Substantial profit generation that supported the amazing growth in Sales.
There is room for adjustments and revisions to cater for inevitable changes from forecasts made a long time ago.
This is still an exciting business to own and watch.
Phrontist

Simply Wall Street have a thorough method of calculating a fair market value for listed companies.
Today they rate S4 Fair Value at £6.14.
They state today's SP value as 80% undervalued.
So why is the SP so low?
Failures of Accounting and Management showing through to the public place.
The business itself is in excellent shape even accepting the slightly lower annual profit forecast.
So, I ask - is there a better share to buy on the LSE at this time?
My answer is, no this share stands out as good value, even if the SP was £6 today.
Phrontist

Ha ha, thank you. Let's hope the BoD read this and DO what is necessary to restore shareholder confidence.
They will have to be wary of a bid swooping in to attract YES votes from unhappy shareholders.

The SP has dropped 5 times from £6.00 to £1.20 in just over 6 months.
Can the BoD devise a business plan to restore the SP to £6.00 by 2022 year end?
This is unlikely to happen unless adjustments are made somewhere within the business.
Personally I feel this is possible, practical, achievable.
But pulling together businesses in 30 or so countries to provide the global digital advertising business will be some feat.
A good start will be Q3 and Q4 showing volume business is being delivered, costs are under control, borrowings are reducing, shares are no longer being diluted, growth is 100% from today's position, the company is operating to a meaningful mission statement from a shareholder view.

Auson
I read an article this morning that said between them they target to 'earn' £500 million over 5 years.

The core of the problem is greed at the top.
The business needs to be based on a different culture, values such as quality, customer service, shareholder value, employee development, etc.
Clearly S4 has a lot to offer, and must be providing this effectively to achieve the Sales growth and the perfectly acceptable revised 2022 profit figure.
But the image portrayed during 2022 is not good.
Phrontist

11:15 Payce
I did mention 'pigs at the trough' ....

11:07 Auson
It is not the 'best talent' required, it is the right talent to execute business at a lower cost than the money received. Etc

In my 17 June post:
Finally, I personally feel trepidation that director and senior manager earnings could be more important to S4 'management' than shareholder value. In this respect SM has form at WPP.
Pigs at the trough comes to mind.....

I have just taken those figures from Google Finance where the 'starting date' for S4 and prior names of the 'business' is 30 December 2016. The Derriston reverse takeover was a progress step to enable an LSE Listing.
Anyway, the SP was floating between £1 and £2 until early 2020.
Then it 'took off'.

on 17 June 2022, sadly my first line said:
The 'audit problem' is a symptom of underlying failures.
Has this business finally bottomed out?
Are business problems now resolved enabling H2 to complete 2022 with predicted success?
Will shareholders continue to over-pay senior management and Directors?
Will S4 become famous for its 'golden hello' contracts to staff, before proven performance?
Does the BoD feel responsible for this situation?
Is S4 vulnerable to a Takeover Bid from a wealthy USA listed company?

A year ago the SP was almost 500% above the 2016 SP starting price.
Today's SP is 32% down on the starting value of 30 December 2016.
Phrontist

There should be an Emergency Board Meeting today.
I ask, how can a Senior Barclays Analyst be so mis-directed in his recent very favourable report?
Is Barclays full of people issuing incorrected Company Reports?
Or have S4 been 'economical with the truth'.
The BoD must get to the bottom of this TODAY.
And appropriate action taken.
Phrontist

Clearly S4 have developed extremely well since SMS founded the business about 5 years ago.
Like Boris, he has handled the BIG issues well (business growth)
But is failing on the home office detail (accounts, forecasting, communicating with the public)
Is it time for a change at the top?
Is the Chairman also being the Business Development Director, the Sales Director, the Finance Director....the CEO?
Phrontist

Nothing is perfect, I have read the RNS.
I have doubled up and expect the SP to be over £2.30 quite soon.
IF we have confidence that SMS is no longer buying up companies during H2 2022.
This is about the type of share you wish to own.
And SFOR still shows great opportunity compared to most other LSE companies.
Phrontist

09:48 Pearls I see you repeat my reference from 8 July post.
It is accurate and stunning.
S4 should pass through 4.xx and 5.xx....
Alas the global situation is restless and troublesome.
But the USA market and USA $ are returning to Bull, it seems, and a substantial part of S4 is USA subsidiaries and USA customers.
And soon a USA Listing???
Phrontist

DYOR but it appears UK mid sized cash generating businesses are attractive pickings for USA ?? money ?? to buy.
S4 is way below a reasonable UK valuation.
S4 is a 'digital' business such as Microsoft, Amazon, Facebook, Shopify, Google, Netflix and many others. Most of these types of companies, once fully operational, can grow (or shrink) very fast due to low cost of supplying a product and/or service.
So, how much to buy S4?
3 times SP for £6 per share, a measly £3.5 billion cash?
Would SMS (10% shareholder) be for or against?
And the considerable rest of S4 director/employee shareholders?
Could S4 go for £7b being £12 per share?
This is a very smart business with a very substantial future!
Someone like Google to strengthen their global grip on the digital advertising business? Or Facebook for the same reason?
Ummm Phrontist