Tap Global Share Discussion Threads

[lance corporal winstanley ash] 14/6/2019 15:02

Paz or should I say spaz.

[sikhthetech] 14/6/2019 13:38

CEO/CFO presence at AGM...

There's been some questionable events since the Road Show and H1 results are months away..given the questionable events I would have thought CEO/CFO owed it to their investors to make sure they are present...


I could understand if 1 of them wasn't there in person but both!! and I would think it reasonable for a phone-in, IF things were progressing as THEY planned but they haven't in a big way...

[gowlane] 14/6/2019 13:17

Thanks 1gw, so they might expect to generate about say $8m free cash flow in H1, after paying for exceptionals such as acquisition and integration costs.

With key information missing cannot really say anymore, the inter company stuff also.

[1gw] 14/6/2019 13:08

In terms of CEO and CFO (physical) absence yesterday, I forgot to say that Tap talked about holding a capital markets day after 1H results. So if they follow through, that may provide the opportunity to talk in person. It's also not long since CEO and CFO made themselves available over here at the road show, so on reflection I think it was reasonable for them to phone in yesterday.

[1gw] 14/6/2019 12:52

gowlane- they said the $70m is net cash and I think they may also have said that they haven't got any debt now, so net and gross are the same.

On the inter-company adjustment I'm saying that's already in the finnCap numbers. So the $495m originally projected for 2019 and the $560m for 2020 would have been net reportable revenue after adjusting for inter-company eliminations. My guess is the $60m (if that's the right number) was an estimate of the full-year amount, so perhaps the $560m in 2020 would have been equivalent to $620m on a pre-merger basis i.e. the $620m would include $60m of revenue counted by both R1 and Tap. How that interacts with the choice to put Tap business through an R1 platform I don't know - is there an implication that by putting $60m of current Tap business through the R1 platform they displace $60m of other non-Tap business? I don't think they were saying that at completion there was $60m of Tap business going through the R1 platform.

The other thing I remember them saying at the roadshow was that R1 numbers (in the finnCap note) had been done "by difference" meaning I think that the R1 number was taking the full hit from the inter-company elimination. i.e. if they thought $560m was the right aggregate number for 2020 and they thought Tap could do $298m without R1 then the R1 contribution by difference was $262m. So R1 without the inter-company elimination would have been $322m - if $60m was the right number for inter-company.

[sikhthetech] 14/6/2019 12:36

"But yesterday they were talking about an industry-wide slowdown in performance sales, so presumably this factor also impacts R1."


An industry wide slowdown which started after the Methbot fraud and P&G demands for transparency...so nothing new, as expected then...
;-)




sikhthetech - 30 Aug 2018 - 18:34:40 - 8415 of 11050 RHYTHMONE - new Name, new Beginning??? - RTHM
Industry changes/challenges.. as predicted..
As expected, last year was about the NEED for change, this year onwards should be about the CONSEQUENCES of those changes.. revenue reduction being one of them... ;-)



"These efforts to proactively eradicate traffic that may not meet compliance requirements from the Group's platforms, including the removal of suspected publishers and advertisers and their associated income, affected the H1 revenues. "

[gary1966] 14/6/2019 11:25

Unless they got in early this morning there won’t be any buybacks for a few days due to the parameters that have been set.

[sikhthetech] 14/6/2019 11:22

"They all seem to be incompetent in running and growing a business. Numerous statements and tweets from them on growing ad market, explosive growth in online video ads, yet all they do is downgrade and struggle without any sign of organic growth."


Same as what rthm always did then..


That jam tomorrow which they failed to back up when it came to results..
Remember rthm also lost over $100m revenue after they supposedly closed Pinball/Leadimpact, following the 2014 blog...

[gowlane] 14/6/2019 11:22

Interesting update 1gw, did you get any feedback on the cash balance, does it represent gross cash or net cash after deducting outstanding loans?

I am mystified by your reference to inter-company transactions, what are the practical implications here?

Are you saying that current finnCap projections of $459m in revenues may have to be adjusted downwards by as much as $60m?

Or has that adjustment already been allowed for in arriving at the $459m figure?

[amadeus888] 14/6/2019 11:10

Wheeze, It is in AGM RNS that they plan to commence with the name change.$900k/week buy back until 31 Aug.

[sikhthetech] 14/6/2019 10:39

rthm's model/accounts have been questionable for years, even more so after the 2014 blog..
and the events since Singer took after the rthm/Yume takeover did raise more questions...

Rthm have previously already cut non-core operations, low margin operations and now this..


If the previous rthm management failed to make the company profitable after years of trying then why should TAP succeed?


Looks like those skeletons are coming out of the cupboard then
;-)

[1gw] 14/6/2019 10:35

And in terms of the decline of R1 revenue I got the impression from the roadshow that a significant chunk of any falloff in R1's 2HFY19 vs 1HFY19 was a lack of attention to sales towards merger completion - and that re-energising the sales function in R1 post-completion would start to turn that round. This I think isn't uncommon, that target company sales performance drops off sharply as sales staff at all levels focus more on securing a job rather than meeting sales targets for their current one.

But yesterday they were talking about an industry-wide slowdown in performance sales, so presumably this factor also impacts R1.

[1gw] 14/6/2019 10:25

borgioli - I'm not sure we'll ever get to the bottom of what the basis of finnCap's "$250m" revenue for R1 in R1's FY19 was, although I suspect eventually we will get to see the FY19 accounts for R1 through the Companies House filing, since completion wasn't until after the end of FY19. So those accounts may shed a bit of light on what the standalone R1 FY19 number was and on any changes to revenue booking policy in those accounts compared to FY18 accounts.

In terms of Taptica FY19 accounts (i.e. calendar 2019), they will have just 9 months for R1 and will have to back out inter-company revenue. I seem to remember a suggestion that this could be as much as $60m - i.e. $60m of Taptica revenue that would have been reported as such before the merger but post-merger will go through an R1 platform where it would have been counted also as R1 revenue pre-merger but can only count once in the consolidated accounts. Whether that $60m will apply fully in 2019 or is a run-rate post-integration and would in any case be reduced for the overall reduction in revenue now seen I don't know.

In terms specifically of cutting out non-profitable revenue, I agree that sounds strange after what R1 were saying at their last AGM. Perhaps they are applying a different "profitability test" (i.e. hurdle rate) for retention?

[borgioli] 14/6/2019 09:57

Thanks for the update.

I also looked at Brassneck's comment on LSE on the AGM and was surprised they were/are still claiming to be cutting non profitable R1 revenue.

Some things i find strange.
The April Finncap note mentioned:

"We expect the initial result to be a halt to the decline in RhythmOne revenue"

So if Tap are/were cutting even more revenue, a halt in decline suggests some market situation caused it, yet cutting non profitable revenue is their own doing.

Also the whole "non profitable" revenue thing. Around 75% of non profitable revenue?

From the Finncap note:

"It enjoys quality demand from quality partners and is a high-margin business that was not being driven by its management."

So if it's high margin, 75% of revenue couldn't have been non profitable imo.
Seems more their cost structure would be too high. That would seem to me to require an employee reduction and other cost cutting but the solution should not be pulling the plug on a "high margin" revenue stream.

[sikhthetech] 14/6/2019 09:56

"A bit disappointing not to have CEO and CFO in the room to chat to (they were on the end of the phone), but the company judged their time was better spent at the coal face in the US rather than travelling to the UK."


Really, very surprising the top people weren't there personally... given the recent actions/events at rthm/TAP, I would have thought it was imperative for the CEO & CFO to be present, so that investors could judge their body language...

[pazzuzu] 14/6/2019 09:53

Thankyou 1gw. Yaniv and druker should have 100% made the effort given the circumstances. Probably didn't want to risk stepping foot on uk soil.

[sikhthetech] 14/6/2019 09:52

It's does seem like the BoD were assessing the mood at the AGM before deciding on the buy back..

They would have known for weeks when the previous buy back was going to end..



sikhthetech - 13 Jun 2019 - 19:22:33 - 11066 of 11108 Taptica - TAP
I wonder whether they wanted to gauge the mood of investors at the AGM before announcing any further buy backs...

[twistednik] 14/6/2019 09:41

Thanks 1gw - very helpful! I agree that the management team now need to stick their hands in their pockets and start sweeping up shares to instil confidence.

[wheeze] 14/6/2019 09:39

Any mention at the AGM of the proposed name change to Tremor International?

[1gw] 14/6/2019 09:34

The AGM was about as good as I could have realistically hoped for, I would say. Started with an acknowledgement from the chairman of the negative reaction to the uber rns and indeed specifically the tone of bulletin board commentary. Acknowledged also the demotivating effect on (ordinary) staff of the low shareprice which meant all were under water on their own holdings.

Some specific commentary on the merits (or lack of) of the Uber claim, their obligation to rns it and the timescale in which they had to do so. More generally the key takeaways for me were what seemed a genuinely-felt defence of the intrinsic value and potential of the company and a commentary on the rapid progress that was being made on integration of R1. It was good to see major shareholders represented and at least one of them happy to talk to private investors afterwards about their continued support for the company.

A bit disappointing not to have CEO and CFO in the room to chat to (they were on the end of the phone), but the company judged their time was better spent at the coal face in the US rather than travelling to the UK. Personally I was disappointed not to get more clarity on the state of R1 at completion (FY19 sales on a "like for like" basis with 1HFY19), but Tap clearly looking forward to what they can do with R1 rather than back to the details of what it was. On the end-2019 cash forecast finnCap did point out that if they felt they were going to be materially shy of the $113m estimate (before 2nd buyback) they would need to advise the market. One curiosity is that the chairman appeared not to be aware at all of R1's success in the pixalate "seller trust index" rankings.

Clearly the bears can simply argue that "they would say that, wouldn't they" to most of the above, but personally I came away reassured.

[borgioli] 14/6/2019 09:10

How was the AGM 1gw?
Any positive feedback from management?