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I share your sentiment. I am hoping for a further extension of buybacks in September H1 results, and resumption of dividends next March at the full year results, by which time R1 should be contributing to profits.
But I would add if the board believe the company is so undervalued, they should be accumulating themselves right? Director buying would be a huge buy signal, but unfortunately they haven’t shown any inclination. Im not aware of any restriction to director buying during a buyback.
Past couple of days have even enormous volumes, but I can’t make sense of it. 4 million shares were traded but the buyback only accounted for 150,000. Today 3 million shares traded, mostly in large chunks, but I expect the buyback again to be only 150,000. Meanwhile the share price has only modestly risen, suggesting either the holdings are being transferred between institutions, or someone is accumulating. Hopefully a holdings RNS next week will shed some light.
I really was expecting 300p at this point, but clearly the Uber news has disrupted the momentum.
For a trading update I would say it’s decent enough, of course you have to take their word about the predictions which is hard to do considering recent events
Despite the awful current SP, the merger with Taptica pretty much saved the investments of myself and other R1 shareholders...we got 50% of an actually profitable and well run company, with what might be a decent shot of making it big (and giving us a decent return). Some of TAPs competitors are loss making and valued at multiples of the current MC. How does that make sense?
Can we trust the current management’s predictions? The company reiterates an expectation to produce impressive profits this year, but how is that possible if they have just taken on board a loss making company and half their business is also declining. Is the Tremor division really doing that well?
The other main unanswered question is client retention and future growth potential. Judging by the name change I think mobile apps will continue to shrink and going forward they will focus on video advertising. This is a decent game plan, I just wish they would be more upfront with cutting loss making revenue
Considering their forwardness so far in delivering bad news, I am willing to give them the benefit of the doubt for now, so long as they demonstrate Tremor continues to grow (it looks like it has the legs to become a cash cow)
IMO There is no way the exCEO (Hagai Tal) did not know this was coming. I’m convinced the buyback is to support insider selling. Is this not brazen fraud?
What confuses me is what Tosca and LO role in all this is. .they are invested in the share price...were they duped, or is there an angle for them here? If the placing was to ball Hagai Tal, surely they would be fuming
Nothing to do now except wait until Thursday...will we even get a trading update? If the cash situation is as rosy as predicted, then you would expect an extension of the buyback and dividends
I had read some of these from last year of R1 - absolutely scathing of the previous management although product appeared to be decent
However the more recent reviews are much better. Here’s an extract from one from last month: “We always had good products but management were clueless and sucked the soul out of the place. In a month the Taptica management are re-energising the place and putting structures in place which could make this the most exciting ride of my career”
Seems like Taptica work fast, and the focus will return towards growth rather than cost cutting (although with the string of acquisitions in recent times perhaps Singer’s efforts were necessary)
Can anyone offer any realistic predictions for H1?
R1 booked 76 million I recall in Q1 last, which corresponds to Q2 this year. Last they had a poor Q4 which corresponds to Q1 this year. And that’s the ‘old’ accounting methods which were supposedly aggressive, and it seems revenue may have shrunk further this year anyway judging by the lack of clarity. Therefore I would be surprised at more than 100 million they contribute, but realistically we can guesstimate at least 80 million I reckon based on more conservative accounting.
Taptica made 144 million last year and Tremor appears to be growing, but performance marketing shrinking. So perhaps overall earnings would be flat.
As such we can expect revenue of at least 200 million, which would put us on track for broker predictions. But that’s very conservative. Anything more would be a very positive sign indeed, and something like 220-230 million would be considered a sign of strength, which I think there is a good chance for.
The SP for R1 rose rapidly almost immediately after the name changed from Blinkx to Rhythmone. It almost tripled!
If the company reports performance ahead of expectations (which is likely considering the very conservative forecast), alongside the name change in June, this should recover to 300p, and I hope for 500p by the HY. Not sure if this would be considered bullish as even that SP would undervalue the current forecasts. The main issue currently is market confidence and is not based on performance for which we do not have concrete figures yet.
Migrating from the R1 board here
What are your opinions on TAP acquiring some of the Sizmek assets? It appears Sizmek had some pretty high value technology but did not have the scale to succeed. I wouldn’t be surprised if we hear about more acquisitions towards the end of this year
In this regard I believe R1 made a smart choice to buy scale with their cash pile, although we are not privy to their integration efforts. R1 is cash generative now, and probably profitable despite the obfuscating broker note
I understand R1 have multiple revenue sources which would protect the new business from sudden industry shifts. It seems smaller players are wilting away whilst a few larger players are actually making profit (and lots of it)
With a cash pile of 80m (conservatively) and growing, I am almost certain they will be out bargain hunting. Scale is king IMO, and I feel the recent merger has taken the business well past critical mass
I’ve been a holder for about a year now and the SP hasnt progressed at all. I can certainly emphasise with some of you who have been led on much longer. I felt it was undervalued back then, and since then the company has clearly made enormous strides and is in a much stronger financial position. That’s what has kept me from selling...knowing the underlying value was building and net profits were near. I have to say though the conduct of the board is shady at best, and very disrespectful of it’s smaller shareholders. To an extent I can understand stt1’s disdain for the company. In all honesty if it was a popular share it would be overvalued and I wouldn’t have invested in it!
They seemed to indicate the 3rd quarter was quite successful. I’m certain had R1 declared a full year profit we would be looking at an SP easily north of 300, so the board must see significantly greater benefit even than that in merging with Taptica. It only follows that they felt reporting a good performance would undermine Tapticas offer who’s sp was depressed). If the results were underwhelming, then they would have declared it by now seeing as it would only have strengthened the case for a takeover.
I really hope for a first quarter update post merger, as I don’t feel it’s fair to keep us in the dark until the next half year report which is in September. I’m confident once the figures and potential synergies come out the market cap will rise to 500m plus, and signs of decent growth will make it a billion pound company. So I’ll hold
If these figures check out then R1s latest quarter will have been brilliant, which alone would have sent the SP north of 300p by now. Right now some are talking about 300p in TAP shares (which would be be approx equivalent to 255p in R1 shares for us) after the buyback as a favourable outcome! Still enough for me hold but at a major opportunity cost.
Unfortunately since R1 have not released any trading updates, and will be taken over before the full year results are due, we may not confirm any of these forecasts until the TAP June update. In face if TAP decides not to release quarterly updates we may not know R1s performance for another 9 months!! And that would be obscured by integration costs and write offs.
In principle, I think this merger will produce huge synergies. I’m not one for conspiracy theories, but the boards coyness during this takeover period tells me they have greater designs in mind which would necessitate keeping the sp depressed, which is really frustrating!
TAP are due to present full year results on March 31st...but I suppose they would only count R1 revenues from the date of the merger completion. What about R1s performance in its strongest quarter?
Does anyone know if we’re likely to get a trading update from either company in light of the merger? Wouldn’t R1s performance this past quarter need to be made public? The fabled bottom line profits never technically materialised, which I would have thought would supercharge the sp.
I’m speculating R1 didn’t release a trading update because it was actually very good so thought they might face further resistance to the deal going through. I notice they gave cash figure from end of nevember although it will be substantially more now. I would like to get revenue figures and current cash in this presentation for both companies for this quarter. In any case by the end of next month we should get a full years report for the combined entity provided this deal goes completes shortly, and it looks like it will
If Taptica recover to 300p, which they should easily do with the buyback, that mean R1 shareholders would get 255p to the current 175p, massive upside and I continue to hold.
Good call makes a lot of sense that this current offer might have been the proposition before the TAP sp crash. If the offer was made public a month or so ago R1 holders would have jumped on the chance at that time and combined with trading updates the sp would have rocketed. Now it really does look like R1 holders are losing out by accepting a dilution on a company with a smaller market cap.
It would have been better if R1 acquired Taptica IMO.
The combined enterprise will be split more or less 50/50 between TAP and R1 shareholders. SP of both these companies is currently seriously depressed and will skyrocket. I’m hoping to see TAP settle around 350p, and R1 around 300 before the takeover is complete...is that being too optimistic? The new company, with nearly 100 million in the bank, 700 mill revs and profitable would be easily worth a billion dollars would it not?
As I said earlier, TAP is looking cheap and is now probably heading sub 100 if it turns out there’s a profit warning or other bad news. There’s something going on behind the scenes there.
A takeover might work in R1s favour. I don’t think TAP could offer a buyout price without taking huge debts or dilution so it seems unlikely. But an R1 offer for TAP at around 100p with a one off special dividend by TAP could be acceptable and yield significant synergies. By that point we should have a clear indication of whether R1 is heading into profitability itself by looking at the latest quarter. The alternative is some kind of merger but seeing as our shares are heading in the opposite direction to theirs it would have to be weighted in our favour.
It seems to me that R1 is currently still too small a company to effectively compete with its rivals and therefore needs greater scale, which an acquisition can fast track them to. If both companies are cash generative I don’t see an issue with debt.
Regardless, the performance for this quarter will be a strong indication of how things will pan out for R1, as the integration should be mostly complete by now and there is little appetite for left for jam tomorrow. The poor volumes tell me bulls and bears alike are holding their breaths here.
How anyone thought about the potential for R1 to buy Taptica? TAP is trading at a significant discount atm but have large cash reserves. A one off dividend would probably be enough to persuade shareholders to approve the sale. And with 100 million in funding R1 could stump up most of it in cash.
They are a profitable company and would bring R1s yearly revenues to a whopping 600 mil. I see TAP have suspended their buyback as they are taking about an acquisition. Could it be they are the acquisition target?
Malbright the outlook statement does mention “The Company continues to trade in line with consensus forecast revenue and adjusted EBITDA is in line with consensus forecast EBITDA”
I don’t think the results are spectacular but they certainly are executing against the plan. This current quarter is nearly finished so for them to carry out a share buyback plan implies they are generating cash. If things continue on this trajectory then they will be breaking even for the full year
I’m despairing at the share price as I thought I had surely bought the bottom. Taptica was valued at over 300m and that is a much smaller (albeit profitable) business. And it still is valued as much as R1 even after the recent damaging news.
It seems highly unlikely R1 will report a maiden profit, but am looking for bottom line losses less than 5m, and revenue over 180m. That would bode well for the January update which is only a month from now which should see significant gains thereafter
The recent troubles in the ad industry have sunk several significant players, and the ad tech companies that have been able to weather it (including R1 on account of their formerly large cash pile) will be picking up the scraps. I think this current climate of consolidation could well turn in R1s favour yet.
you cant really blame shorters or algos for the current sp, truth is theres little interest for a company with a track record such as this.
There will not be meaningful SP movement until bottom line profits happen, but when that happens it will hit 500p. Af far as im concerned thats the way it should be. Im skeptical it will happen at the half year results because of the slow first quarter, but feel confident about the full year. Either way im willing it wait it out.
At first I was very concerned about Singer taking over the board, and so did the market, but now it looks firmly like a positive and Bonney is the ideal man for the job. Before Ted unexpectedly resigned this share was heading north of 240p, and I think the sp should recover to 240-300p in due course but seeing as there is so much uncertainty still about profitability in doubt it will return to 500p without further evidence of progress It appears the company has weathered the scare about recent industry challenges. If they come even remotely close to the EDITBA targets I think they have a decent shot at a bottom line profit, which i am really hoping for this November. The only spanner on the works could be restructuring and integrations costs. Am I being unrealistic?
I hope you're right Brassneck. 56 cents per share equates to >30 million earnings for the year. Like you said, once we get the half year results you would expect a hefty bottom line profit if they are to make that estimate, but I think the market would react very positively to just breaking even! If they actually hit those numbers the share price really would become 720p
The consensus estimates from the reuters website also stated earnings of 11 cents per share for FY 2018, which was a bit off lol