Communisis Share Discussion Threads

[speedsgh] 05/12/2017 15:56

Share price seems to have shrugged off the purported closure of Psona thus far. Having decided that I would prefer to live without the uncertainty going forward at this point in the stock market cycle (market appears to be heavily punishing any slip ups), I have exited my 2 separate holdings in recent days. Having held since 2012, I am now waiting for it to make a mug of me. Cue a takeover announcement!

[mount teide] 05/12/2017 11:55

According to Euroclear's stock loan data report for November published today, the short position increased to 1.62% from 1.34% in October.

[masurenguy] 05/12/2017 08:33

Hi ES - I don't really view them as "free shares" either since they are still part of a portfolio where I have taken some profits via a partial disposal on one component. They still sit there showing a "book cost" on the balance of shares retained and the current paper profit at todays price. However, I suppose that psychologically I'm aware that, on an individual basis, I've already recovered my direct investment on this particular share, which I guess adds to my "comfort zone" where it is concerned.

[taurusthebear] 05/12/2017 08:24

Having done nothing in the last week, month or year, I continue to do nothing.. :0)

[salchow] 04/12/2017 17:21

Having sold out at the peak last week I came back in immediately on the news of Richard Griffiths recent purchase. The Psona issue seems very immaterial.

[edmundshaw] 04/12/2017 16:24

Mas, your portfolio approach is pretty close to mine. I don't really talk about having "free shares" after reducing, since profits in one share have to offset losses elsewhere (risk is not free), but I too have recovered more than my investment here (pre dividends), and this has become approximately an average weighted share for me now. I still see value, but nothing exceptional any more either on the growth/value or risk sides.

[speedsgh] 04/12/2017 13:41

Looks like Richard Griffiths is hoovering up all the sells. Back over 23% from just under 20% previously. Vote of confidence from him.

Holding(s) in Company -

[masurenguy] 04/12/2017 12:16

Well a real opportunity to officially comment on the Psona situation in todays RNS was not taken and therefore we still have no idea what the future potential implications might be, either in financial or strategic terms. Todays comment that "Trading expectations for 2017 remain unchanged" does not really have any bearing on this development either since the current fiscal year end is only 4 weeks away and therefore any strategic impact would be in 2018. In financial terms, any costs relating to closure and redundancies should be taken in 2017 as exceptional costs. These seem to appear every year and average around £3.25m, which has diluted pre-tax profits by circa 20% over the past 3 years. Obviously this years exceptionals will not be disclosed until the final results are announced next March.

The sudden departure of Mark Stoner is also interesting. He and Andy Blundell were the only two executive directors on the board alongside 4 x NXD's. Less than two years ago the other two executive directors, Howes and Rushton, also departed and their roles were restructured so that the number of executive directors was reduced from 4 to 2. The only remaining and constant executive director during this timeframe has been Andy Blundell. It seems that he is therefore in a very powerful position as CEO, wheras the tenure of any other executive director appears to be rather precarious.

I find these developments rather unsettling and also damaging to management credibility once again just as this seemed to be recovering after the last failure to update shareholders on unexpected developments that negatively impacted profits in 2014. Consequently I reviewed my position first thing this morning and very gradually halved my stake and the profit on this disposal recovered my entire investment here. This reduces my overall stake in CMS to below 10% of my portfolio and it has now dropped to my third largest holding. I intend to watch further developments with greater interest to determine whether to reduce further or to add back in due course.

[edmundshaw] 04/12/2017 10:17

rhomboid, I get the impression Steve Rawlins was at a loose end after his last company EDC Communications was wound up... so I guess that appointment could have been made pretty quickly. Though, of course, as Stoner 'stepped down' today, that seems an abrupt departure... be interested if anyone has informed insight.

[boboty] 04/12/2017 09:55

Last year’s accounts refer to a five year forecast but I couldn’t find it. Is that what cms is referring to re expectations. I found an analyst forecasting 7.45% growth in ? And an ft article talking about 12 % growth in eps turnover profit ?!! Cms should be upfront and spell out for people like me what the expectation they are referring to is.

[rhomboid] 04/12/2017 09:23

Oddly the FD must have resigned a while ago if his successor started today, if so that should have been an RNS in itself. Not referring to Psona closure or giving any detail in the way of figures is also poor. For a communications biz it’s worse than poor imho. It’s staying on my watchlist just out of curiosity

[edmundshaw] 04/12/2017 08:54

Interesting change in the FD. Stoner never impressed me as a speaker, and it IS a communications company, but I assumed he must have been good at the numbers stuff. Perhaps he is taking the hit for some of those failed acquisitions? Again, who knows...

[edmundshaw] 04/12/2017 08:50

"Whatever you were expecting before, please continue to expect it". Actually, I hate that kind of comment, stating current expectations are unchanged but leaving the reader to guess or try and find out what those current expectations are supposed to mean. As if we all just know... and anyway whose expectations, the board's, "the market"'s, Blundell's? But many many companies do it.

[mount teide] 04/12/2017 08:45

L2 - from the opening bell the bid has been packed with large orders in an effort to absorb volume selling and slow downside momentum.

Taken advantage of it to sell out the remainder of my holding.

Good luck to all.

[boboty] 04/12/2017 08:20

What are the current trading expectations that cms refer to?

[boboty] 04/12/2017 08:20

What are the current trading expectations that cms refer to?

[mount teide] 04/12/2017 08:07

'Trading expectations for 2017 remain unchanged.' Lol!

SHAPING THE FUTURE OF CUSTOMER COMMUNICATIONS - is what they claim to do!

If their clients receive communication services as exciting and detailed as their shareholders we are in real trouble!

[owenski] 04/12/2017 07:34

Another year of exceptionals I suspect.

[owenski] 04/12/2017 07:33

Excellent TU, jam packed full of detail ;-)

[masurenguy] 04/12/2017 07:29

FD change and trading expectations update. No reference made to Psona.

RNS Number : 2175Y
Communisis PLC
04 December 2017

CFO appointment and Trading update

Leading provider of integrated marketing services, Communisis plc is pleased to announce the appointment of Steve Rawlins to the position of Group Chief Financial Officer (CFO) and to the Company's Board of Directors, with effect from today. Steve has extensive experience of the digital media, business services and FMCG sectors in both the UK and overseas markets. Most recently Steve was CFO of EDC Communications, a Private Equity backed group of digital media agencies. Previously he held senior finance roles at Vendia UK Ltd, Uniq PLC, Caradon PLC and The Gillette Company. Steve brings a range of specialist skills and experience, which the Board wants to introduce into Communisis at this stage, to help deliver the next phase of the Company's growth. He will report to Andy Blundell, Chief Executive.

Mark Stoner, Group Finance Director, steps down from the Board today. He will work with Steve through Q1 2018 to facilitate an orderly handover, after which he will leave the Company. Mark has played an important role in the development of Communisis in recent years and the Board is grateful to him for his contribution and commitment. In respect of Steve Rawlins' appointment, no further disclosures are necessary under LR9.6.13.

Trading expectations for 2017 remain unchanged. Communisis will announce full details of its Preliminary Results for 2017 on Thursday, 8 March 2018.

[sharw] 03/12/2017 21:15

Also in 10 Little Portland Street:

The 12 Agency av. 22 people last year

Psona Films 5 people

Communisis Digital av. 69 people last year

and not forgetting Communisis Head Office - the 2016 a/cs show 145 people allocated to central costs and 27 to corporate but as to how many work in Little Portland St. your guess is as good as mine but you would only need 15 to make your 111.

[mount teide] 03/12/2017 18:28

sharw - many thanks for your comments.

If over 150 staff are based at Little Portland Street and CMS claim just 39 work directly for Psona, it begs the question why 111+ other staff members are based in such an expensive location for office facilities and basic administrative staff?

Outside a 10 mile radius of the City its possible to employ administrative staff for at least £10k a year less - an annual saving of over £1m for 100 staff.

I suspect the numbers employed directly and indirectly in running the Psona business are probably higher than CMS state.

[sharw] 03/12/2017 16:30

MT - while agreeing with your sentiments there are a couple of points:

...."will the write off cost of this major strategy change result in another profit miss". Of course not because the company always goes on "Adjusted" profits and eps. The closing of Psona Agency will be taken after the "Adjusted" figure as "Exceptional restructuring costs" in which CMS delights:

Exceptional restructuring costs £m
2013 3.5
2014 3.3
2015 2.0
2016 4.3

Exceptionals recurring every year are a red flag.

"According to previous company statements there are over 150 staff based in the Psona London offices"

Yes, but not all are Psona Agency - other parts of CMS operate out of 10 Little Portland Street including 12 Agency to which some Psona staff will transfer.

According to the 2016 Psona a/cs the average number of employees in 2016 was 39 at an average cost of £70,147 including pension and social security.

The same report says that the decision had been taken to move the businesses of Communisis Data Intelligence Ltd and Psona Glasgow Ltd into Psona in January 2017 to lead Psona into profitability (!), so let's have a look at those.

Communisis Data Intelligence Ltd 2016 average number employees 23 revenue £3.5m loss bt £311k.

Psona Glasgow 2016 average number employees 16 revenue £972k loss bt £128k.

[mount teide] 02/12/2017 20:31

According to previous company statements there are over 150 staff based in the Psona London offices - so it's probably safe to assume there will be a considerable cost to closing down the business, since most staff will have been on London 'marketing' salary packages, which are way above the average in Communisis.

Additionally, it is particularly galling that the original senior management team at Psona were only replaced 18 months ago at considerable cost and, the present team, will almost certainly have similar contracts with 12 month notice periods.

By shutting Psona down lock stock and barrel prior to year end, correctly, Blundell is presumably aiming to take the full write off this year to clear the decks for 2018.

The $64 million question is: will the write off cost of this major strategy change result in another profit miss, that disingenuously, Blundell again attempts to dress up/report as a result broadly in-line with management expectations?

If so, I suspect for many shareholders Blundell will have drunk his last pint in that particular saloon bar and should expect to see the share price treated mercilessly.

Its been 5 years since Communisis raised £20m via a placing at a 20% discount to the then 50p shareprice to service a new contract with Lloyd's that appears to have consistently fallen short of the returns expected - and three years since he used circa £40m of debt and cash to acquire a number of high priced new media 'businesses' that have almost without exception performed atrociously.

Shareholders, might well ask where the company and share price would be today had Blundell not diluted them by raising £20m at 40p and, then spending £40m on companies that collectively are still yet to contribute any return whatsoever on the 'investment'.

As incredibly, since the £20m equity raise when the share price was 50p, the CMS share price price has averaged circa 50p during the 5 years since.


AIMHO/DYOR

[jtcod] 02/12/2017 07:24

Have to say I agree with comments that the company should have put out a statement. Management would probably counter that this action is not financially material but the (perceived) change in strategy is. I think it is telling that a good number of long term holders sold out at hearing this news from the media rather than the management. Trust was the casualty.