Member Info for RunS4

As I'd written previously, revenue growth is needed for us to break out of this range bound trade - albeit range bound at a higher base curently. Bull case valuation is 88p - hmm, we know what these sell-side analysts are like. They'll be chasing their tails to push target price higher once growth materialises, but that's currently looking like a 2027 story.

@1pencil - the tea leaves, I suggest, are very obvious to see. The pumping targets for S4 on this board aside, what will truly move the needle for S4 to outperform and break out to £1+ highs, even if it means that we have to endure a short term bubble burst when the AI Capex cycle eventually breaks, is just that - the AI capex bubble needs to burst. This BS capex spend will not result in the ROI that the hyperscalers and every other dumbo are hoping to earn.

That's the only scenario when capital moves from Capex to Opex, and that's what it'll truly take to marketing spend to come back robustly in the US. And that's will take us to multi-year highs!!! That's my strong opinion. ;-)

It's definitely rate hike worries in the US with the 'strong' employment report today and throw in the fact that chip stocks are overextended.

When will we get to 'overextended' status is a big question and the easy answer is when we get to sustainable revenue growth. 2027 anyone? Baby steps and I'll take a clean, sustained close above 50p first before dreaming of 100p, let alone 200.

Cheers, TargetPractice. I may differ a little bit on whether FUTR is a better investment than S4 ;-) - Geographical revenue spread and management quality being a couple of factors, but FUTR does offer a fabulous opportunity at these levels!! Over the medium to long term, multi-bagging from these levels should be a no-brainer - if only one has a bit of patience!!

I'm adding more here at these levels.

Future has been on my radar for 12 to 18 months, but never ventured in earnest, but at this juncture I find this a compelling investment opportunity. I occasionally check out posts on this message board and do find some important updates/views from knowledgeable posters. And of course, the usual gripes about the CEO and how he isn't cut out for this and views about how the market is just about the perfect discounting mechanism and just because the market says FUTR is valued at £3, then that's what we need to live with. The reality couldn't be further!!! The London Stock Exchange is freakin shallow and a small trade of a few thousand trades can violently move the stock price around. And the obvious thing is that revenue growth is the only metric that matters and everything else be damned. FCF yields of >30% is common place - SFOR and FUTR are prime examples of this complete lack of focus on this very important metric for shareholder returns.

I noted @ByeHi had built a good long position of circa 0.4% in FUTR - good on you. I built a similar position in SFOR, took a little profit there recently after the run-up from 16p to 40s in a few weeks, and was waiting for a good investment when the fall back in April to the 3s in FUTR presented me with one. I'll be slowly adding even more at the current levels as I do believe it is vastly undervalued on any sensible metric there can be for a business that's throwing off copious amounts of cash and where debt isn't really a concern!!!

Good luck holders and don't let impatient ones on here put you off!! The stock market is a great wealth transfer mechanism from the impatient to the patient and that never isn't more true of a business where sensible valuation metrics have fallen by the wayside.

NigeCo - cheers. I suppose my point is even more fundamental and that is that the S4 SP should've never gone into the teens, ever. You're talking about circa 40% FCF yield at that level and that's outrageous. Only on the silliest/shallowest stock markets on the planet (planet Glow notwithstanding) will we ever get that kind of valuation for a company helmed by someone like SMS. It dis allow value investors to scrape shares at that bottom, but plenty would've suffered too!!

And you're starting to see that kind of valuation for companies like Future PLC, although the quality of management there isn't quite of S4's calibre.

"Just waiting on revenue to return to growth, latest analyst forecasts for revenue growth is 2027, then we are off to the races."

100% with you on this, Nige. The first bump up in YOY revenue for a certain quarter will give this silly market a lot more certainty around growth. The focus on dividends from this year onwards is a massive plus. In the meantime, the likes of Glowacki from planet Glow, or no clue lse2000, or MildLaddie -- they look to get people panicky and try to get their trading profits.

There seems to be underlying support that won't let S4 get much above a 5.5% yield - i.e. not let it go down much!!

That's about par for this shiite stock exchange with a sole focus on 'revenue growth' as the defining metric for valuing stocks.

All good in that update, IMO, and nothing that was a suprise. We'll probably see a decent clip increase in QOQ revenues from Q1, but YOY growth may still be a quarter or two away and that could be the angst.

Focus on getting costs lower more is still there and net debt free in 2027 was stated. All good, IMO, and the traders need to shake themselves out I suppose - whilst we wait with a >5% yield for 2026 and onwards.

GL..

Good read in the link below - The big strategy consulting firms are pivoting to outcome based delivery vs billable headcount. Marketing HoldCos are still behind the curve - not S4 though. Martin and Co saw the writing on the wall early doors and slowly pivoted to Outcomes based billing/revenues as one of the first in our industry. And AI is the key enabler for all these massive changes afoot. Kudos to the top management at S4 and hopefully the revenue turnaround will be upon us sooner than later in 2026.

https://www.linkedin.com/posts/ivanfernandes1_first-mckinsey-now-booz-allen-the-consulting-share-7465039822307426306-_a7Y

Personally, I don't care that much about today's move. Yes, bad for portfolio value, but just as it went up on no volume in the past few days, it's come down on not much volume. Traders taking profits is the easiest explanation!!

Time and S4 waits for no one!!! LOL.. :-)

"I don't think that SMS would entertain a takeover for a valuation of less than £1bn. I don't see anyone willing to pay such a large premium at this stage. I think that a deal maywell be in the pipeline but could be two years away, when the company is performing at a higher valuation. "

Nige et all - this for me is spot on. We'll need to get back on the growth track before we can command bigger valuations on both the stock and the M&A markets. In the meantime, we just collect our (now) 5% dividends and wait for the revenue turn to land. A question about our tech services division did get asked in the Q1 Q&A, and Martin sounded optimistic that we're ready for that bounce off a very low base. That plus the US marketing spend ramping, if only slightly in 2026, coupled with the new customer wins over there - that's what could help us this year. And give us a good base to win more customers in the US - UK/Europe be damned ;-)

All to play for!!

LiveRamp is more a data collaboration platform than an AI marketing agency - it's BS headlines. Sadoun's bet is that data connectedness and interoperability is a winning one after their Epsilon acquisition. The fact that they're growing revenues means they can get better valuations, and hopefully we'll get over that revenue downturn metric in 2026 and boost our valuations too.

We've seem some cuts in Europe after the BMW scope reduction - Pascal Stoud is gone and I'd wager quite a few more from high cost countries that supported BMW - better margins than forecast for 2026? I'd say so.

Feel the inescapable need to show off why their trading decisions are the smartest ones going around the planet!!! LOL...

Amen, Nige. Traders eh? ;-)

"Debt has increased by 24 million from last quarter ." No, Debt hasn't increased by 24m. There is a big difference between saying that Debt has increased by 24m and Net Debt has increased by 24m.

Net Debt does increase when the net effect of Gross debt minus cash in hand increases from one period to another. Case in point from Q4 2025 to Q1 2026.

At the end of Q4, gross debt on the balance sheet was £328m and cash in hand was £241m = Net Debt was circa £87m. We know that €85.2m gross debt (out of €375m outstanding) was repurchased in Q1 and so the Gross debt at the end of Q1 2026 was circa £253m. That's what Poker meant when he said debt was coming down and that's spot on.

However, cash in hand has obviously come down much more than the reduction in gross debt - a simple calculation shows that cash in hand reduced from £241m to £131m and hence net debt has increased to £111.8m (£253 gross debt minus £131m cash = circa £111.8m net debt) from £86.9m at end of 2025. And the obvious reason is the working capital decrease unwind in Q1 and that then equalises in Q4 - as it always did for the past 2 years!!

Simples!!! But the good news is the stated goal to reduce gross debt to €250m ASAP this year (another €40m more to repurchase to get there), and that would reduce interest costs by a good £7m this year and that's 1p in additional adjusted earnings. ;-)

Was out at a corporate golf day today, but was tracking via my ig.com app - It was an amazing day -- Fabulous volume, new nearly 2 year highs. Happy to be wrong yesterday that the LSE traders who're so revenue focused would take us down on the back of the Q1 update. The 50% adjusted earnings payout as dividends + paying down €125m of the August 2028 debt at a discount, I'd think are the factors pushing us towards these new highs.

If we can get revenue growth going in H2, that's what could get us into multi-year highs territory above 65p.

Good weekend holders and we deserve the returns that we're seeing after a few torrid years.

Nice one, Herr Munger. THat's a lot earlier than usual - we have got our finance systems well in the groove. :-)

Thanks, Nige. That was a short and sweet call, but interesting shout on the medium term dividend policy. We're looking at 50% of adjusted earnings of circa 6P consensus, but the reality is that with gross debt already reduced by €85m and to be reduced by another €40m in the coming months, we're looking at a good €6 to 8m interest payment reduction this year and that can easily support close to increased earnings too!! I'd think that's not factored yet into consensus sellside estimates.

I won't linger long on BMW's impact lest some of the conspiratorial lightweights on this board conjure up in their insecure and feeble minds that I've joined forces with lse2000 or profit taking SickNote (ROFL), but suffice to say that holding the forecast even with the reduction of revs (circa £4-5m in the quarter based on the CFO's response) from an important EU customer, is a huge plus.

If only we get to see more green shoots this year on the revenue growth front! We'd be off to the races. :-)

Cheers, Auson. North America is still holding up well, all things considered, and that's great.

Impressive price action today and that speaks to the institutional support for S4 - good tidings indeed.