Facilities By Adf Share Discussion Threads

[disc0dave45] 12/1/2023 11:55

Glad you’ve taken onboard risk with your allocation.
Yes haven’t mentioned IPO risk, I always digest their admission document and cross reference to what they actually deliver and say - thus the ever increasing list of contradictions made by this BoD.
Not denying this looked a very good investment proposition initially, but it was a highly “tipped” share which IMO should also be taken as a signal for a lot more research to be undertaken rather than just following the “crowd”. As can be demonstrated by the “gang” that follow each other and contribute endless ramps on the other thread and ban anybody who has a contrarian / opposing view……BoD interviews by a shareholder will invariably struggle to be as challenging as IMO they should be, so a big pinch of salt required.

[yasx] 11/1/2023 23:44

DD,

I agree there are a few issues relating to either comments made by the Board or the absence of them that do give rise to a degree of concern - the size of my position reflects the degree of risk in holding this stock.

As you rightly point out, in 6 months we will know which side of the fence was the right one.

One issue that you have not pointed out is that the risk with recent IPO Co's is always much higher since more oft than not they do tend to disappoint. That also contributes to the extent of risk - but, I think ADF has appeal as a speculative play forming a small part of a diversified portfolio - which is how I have incorporated it in my portfolio.

[disc0dave45] 10/1/2023 22:13

YasHopefully you will do okay here and my negativity is skewed because of my complete mistrust of the BoD and how the business is managed.I've posted numerous instances starting with their statements regarding their order book. And more recently their deliberate omission to inform the market that they also took on a significant (in the context of the total consideration) amount of debt when they acquired Location One......unbelievable IMO, £2.7m of debt on an acquisition £8.86m and they simply didn't tell the market!.

[disc0dave45] 10/1/2023 22:00

Post 27 - You still haven't demonstrated that there's net growth. Disney subs have increased and Netflix has reduced. Give it 6 months and we will both know whether or not there's actually been any growth.ADF are not the only operators in this sector and IMO are far from the best in terms of how it's managed. They failed to pass on their additional costs to contracted customers (why?, they are operating in a contract based environment and should not be incurring additional costs due to say short duration productions as the classic example).They've stated that Translux, their primary competitor with about the same UK market share, will undercut them on costs. Studios / Production Companys will also be seeking to cut their budgets during a recession and from the last report from Translux they have also invested heavily (c £13m) in additional fleet so IMO they will be taking trade from ADF.

[disc0dave45] 10/1/2023 21:46

Post 21 - fair enoughPost 22 - That plan is 3 to 4 years away.Post 23, 24, 25 - As said previously, it's growth and net subscriptions that's key. There's zero evidence to show that there's growth during a downturn, quite the opposite. Not bothered what Marsden Proctor spouts tbh.Post 26 - you've mentioned other retailers. If you look at gross margins and those that sell premium brands they are in some cases beating expectations, they are able to pass on costs to customers because their customers will still buy the product as they can afford to. Those that are struggling with their finances due to increased household costs (mortgages, energy, food, etc) will seek to cut out non-essential luxuries like their Netflix, Sky subs.

[yasx] 10/1/2023 20:58

DD,

Here is more counter evidence ....



Disney+ has defied fears of a slowdown in the streaming market and overtaken Netflix for the total number of subscribers.

[yasx] 10/1/2023 20:48

If the consumer sector is going to contract markedly (something that has already been noted) then why would you select a Co. with a niche offering that is indicating stable or rising, not falling demand. Why would you not have applied the same stance to retailers and others in the service sector since they are far more exposed to a consumer slowdown?

Look at the retailers - the likes of Asos have lost some 75pc or so over the past year with many going bust. If you want to focus on reduction in consumer spend, that is where you ought to have been focusing in my view, not a provider of services that has and is likely to continue to fare much better. .

[yasx] 10/1/2023 20:43

Hastings previously addressed this following his discussion with the Co. as follows:

""There is an element of frustration with the perception regarding the industry as recently played out in the press regarding Netflix subscriptions. Proctor says that the major industry players have very large pockets with multi revenue streams and he views increasing competition in the space positively. “Netflix enjoyed the lie of the land for a long time without much in the way of competition and Amazon and others are really just starting out on their journey now. It will continue to evolve and that is good for us and subscribers too, so we don't see it as a problem for us, rather it is a positive thing. Apple for instance are building their own studios here now and they will be here for a long time, so it is looking very good with positive signals that are contrary to what has been seen in the press around Netlix, so we are therefore positive and view the future as being very, very bright”.

[yasx] 10/1/2023 20:41

"The company is spending big on content to shore up its position in the increasingly crowded field of streaming video as competitors including Disney+, Hulu and HBO Max try to take market share. Netflix has said it plans to spend $17 billion on content this year."

hxxps://www.latimes.com/entertainment-arts/business/story/2021-07-20/netflixs-subscriber-growth-has-slowed-dramatically

[yasx] 10/1/2023 20:40

One reason for issues at Netflix (apart from consulmer slowdown) is growing competition - that is not a bad thing for ADF. Moreover, in order for the likes of Netflix to maintain competitiveness in the market is is spending more or around the same, not less, on content going forward.

hxxps://www.statista.com/statistics/1299571/content-spending-disney-vs-netflix/

[yasx] 10/1/2023 20:37

Or this...



"Hollywood takes over Waltham Cross as £700m plan for Europe’s largest film studios with 4,500 jobs
24 Mar 2022 08:12

Hollywood’s Sunset Studios is moving ahead with its plans to pump around £700m in a new film studio in Waltham Cross, a project that should generate around 4,500 jobs and create the largest film studio in Europe.

The Hollywood giant has submitted a range of plans and proposals to the local council, after holding a consultation last autumn.

The new complex, which will be located close to the M25, is designed with “this century and the next” in mind, according to the developers’ plans."

[disc0dave45] 10/1/2023 19:37

Morgan Stanley have downgraded ITV again, think that's three times now - perhaps a read across to here today?.

[disc0dave45] 10/1/2023 19:36

" all the evidence I am seeing is that more major players are entering and competition to provide improved content is stepping up"Can you post up some info please.There may be more entrants but net subscribers is key, for instance Netflix are forecast to lose 700k UK subscribers over the next two years - are new entrants taking these customers?.

[disc0dave45] 10/1/2023 19:17

YasTake your point that at the moment the business is saying they are on target (we will know next month!). Although I believe they won't hit their forecasts (forget EBITDA numbers as meaningless). That said my general point is that this is the start of reporting where more profit warnings will be coming as the impact of the economic downturn will start to hit numbers. I also still contend that why would this sector be completely immune from a recession?.....it won't.

[yasx] 10/1/2023 18:47

DD,

As I have stated, if this transpires to be the case then management credibility would be in tatters - but, for now it has not been indicated that this is being observed or likely to be observed.

Rather than pointing out articles about a reduction in streaming services, I respectfully submit that it might add more weight to your thesis if you could show articles suggesting less entrants in this area - all the evidence I am seeing is that more major players are entering and competition to provide improved content is stepping up - both of which are beneficial, not detrimental, to ADF.

[disc0dave45] 10/1/2023 18:38

"the point being that just because a risk is mentioned does not translate to it happening"Have to completely disagree on the basis the risk in terms of an economic downturn and cost of living has and is happening yet the BOD say it will have zero impact - which is as I've factually pointed out in complete contrast to the negative impact that will occur as stated in the Admission Document. Media articles have also stated that the current macros are impacting on subscription services.As you say a recession hits the majority of businesses so to assume ADF are immune is IMO ridiculous. Studios etc will be cutting their costs wherever they can, thus Translux will be taking work from ADF IMO.

[yasx] 10/1/2023 18:11

DD,

I think it is overly harsh to state that given various risks were outlined in the admission document it follows that these must therefore be certain (or even likely)to occur. If you look at any admission document for any Co., many risks, general and specific are highlighted which never materialise nor were they ever likely to. For instance, ADF highlight cyber attacks as a specific risk ,but we can't suggest that this implies they have or are likely to be hacked. They also indicated that failure to get a suitable acquisition is a specific risk, but have gone on to make an acquisition as they had intended; the point being that just because a risk is mentioned does not translate to it happening.

The risk of a protracted downturn in the economy is not a risk specific to ADF but applies to any Co, and especially to those in the service/retail sector and so on. If you were to adopt the strategy of avoiding any Co. unless it is immune from a contraction in spending, then right now you ought not to be investing in anything except, say, the oil/energy plays etc. If that is your stance, then, in that case, most shares would not be suitable for you to consider at this point in the cycle - that would lead to you holding cash which would erode at the rate of inflation just by sitting there. Of course, my approach is to have a diversified portfolio, not just equities but different instruments which takes into account hedging strategies and includes cash. i agree that most shares almost invariably track the trend of the market as most previous bear markets make clear.

ADF has held up well relative to others which have suffered more due to reductions in consumer spend - this is because it has a diversified customer base and although Netflix might be scaling back to some extent, there is competition in this space form other entrants which helps ADF.

I have not met nor spoken to management and so at this stage am simply judging them on official statements - I await the next update and will review matters then. I agree if they suggest a slowdown then it will get hit hard since it would show a lack of visibility and question their recent statements. However, I do not see the risk factors in the IPO document as a canary in the coal mine.

[disc0dave45] 10/1/2023 16:47

Their update, possibly early next month going on last year, will be interesting.

[rp19] 10/1/2023 15:39

Given the reassuring statements, if they don't meet expectations then it impacts on credibility going forward.

[adamb1978] 10/1/2023 15:17

Hi Rivaldo

Fair point about distance to go from H1 however their business in the last couple years has had a H2 weighting (though difficult to split covid out from that to understand true seasonality) and the update from Hastings in December was reassuring.

I think the share price weakness probably relates to a FT article a couple weeks ago speculating that streamers will be holding budgets flat for 2023, or not increasing them as much as planned. That said, the recent acquisition should add up to 1p to EPS for 2023 so I still think 6p is about right for the year just started.

Adam

[starpukka] 10/1/2023 12:47

rivaldo, when is the next update due ?

[disc0dave45] 09/1/2023 16:33

For those interested Lord Lee's declared share holdings. Interesting to note he sold his ADF shares 21/9/22. The share price that day was between 47p and 51p. Don't know if he bought at the IPO (50p) or whether he sold on the back of their H1 results.HTTPS://members.parliament.uk/member/1132/registeredinterests