Rhythmone Share Discussion Threads

[dippy5] 26/9/2018 10:52

Shorters dilema: They are in a situation where because of their antics in the last few years, not many investors will want to buy this share.So, inspite of a good update they still have room to play with the share price. At the same time they have sold about 4 million borrowed shares in order to controll the price, which they have to buy back. The problem for them is that the present share holders are by now well aware of their antics and are not falling for their tactics. So, while there is not great deal of pressure on them at the same time is not on their side. They must increase the price in an orderly manor in order to be able to buy back. Let see how they deal with this dilema.

[barkboo] 26/9/2018 10:48

Those that countered the attack at around April and July this year - have beaten the gangsters, and beaten the aim...I supported the share price at around 170p, will reload that at around 444p in preparation for a further possible attack.

Some family steamed in as low as 160p - well done to them!

Scaffolders tell me there is confidence behind this Singer play - he will never be the gentleman that Mr. Lynch is....he might just be as clever with the market?

I see the bid is moving nicely today.

[football] 26/9/2018 10:38

Forget a cash ISA! This FTSE 100 share could help you retire wealthy
THE MOTLEY FOOL
Sep 25th 2018 7:25AM

IMPROVING PERFORMANCE
Another company that could provide strong growth potential over the long term is technology media stock RhythmOne(LSE: RTHM). It announced on Tuesday that its CFO has resigned, with a replacement already having been made.

The company also released a first-half trading update, delivering strong growth in revenue and profitability. That growth was fuelled by an impressive performance in programmatic platform revenues, with the business delivering on its key objectives for the year. For example, it’s grown its base of data-driven engaged audience segments, while innovating around video and connected TV advertising.

Looking ahead, RhythmOne is forecast to post a rise in earnings of 11% in the next financial year. This puts its shares on a price-to-earnings growth (PEG) ratio of just 0.4, which suggests that it offers good value for money at the present time. While it’s a relatively small stock which could experience share price volatility, it appears to have a sound growth strategy as well as a wide margin of safety. As a result, its risk/reward ratio seems to be favourable at the present time.

[kendonagasaki] 26/9/2018 09:59

Jon C'The only GAAP you know about is the one in the middle of a goats derrière?

[phil140158] 26/9/2018 09:55

Midas, thanks for posting the Singer note.

[1gw] 26/9/2018 09:51

Well, things are looking pretty good there too don't you think? Probably not quite positive in 1H, but a reasonable chance of IFRS GAAP profit for the full year? So we would have:

-$92m FY16
-$19m FY17
-$14m FY18
>0? FY19

That wouldn't be a bad trend. And given the high non-cash drag from amortisation in the IFRS numbers, the adjusted profit and cash generation should be pretty impressive this year.

[jonc] 26/9/2018 09:38

Sod adjusted EBITDA.

I would rather concentrate on GAAP profits.

All the rest is froth and unsustainable.

[1gw] 26/9/2018 09:22

"investors are likely to focus on H1’19 EBITDA progress"

STT on the other hand...

[loafofbread] 26/9/2018 09:13

N+1 Singer, "ridiculously cheap'.

[wheeze] 26/9/2018 09:12

No it was my computer playing tricks or the crummy advfn software - that was MidasX, not JonC

[wheeze] 26/9/2018 09:11

What's happening here ? I've just upticked a post by JonC - Was that word at the end of the paragraph, BUY ?

[midasx] 26/9/2018 08:55

N+1 Singer Note

Alongside the CFO change announcement, RTHM included a compact update on trading. While H1 revenues are off plan (weak Performance market and integration disruption), lasting effects look likely to be modest and the biggest implication of H1 EBITDA guidance is that costs have been reduced much faster than expected, providing comfort for the full year. EBITDA looks set to continue to soar and investors are likely to focus on H1’19 EBITDA progress; c$20m compares very favourably with $3.1m in H1’18 and $14.0m for all of FY18. Our new FY19 forecast is for $48m. The stock trades on just 3.6x FY19 EV/EBITDA. We adjust our TP to 533p (was 730p) implying investors can more than double their money. BUY.

[sikhthetech] 26/9/2018 08:48

Gl,
"$360"..
That'll be about $60m below their previously reduced consensus of $422m, which was already around $60m below their forecast from earlier in the year..

[jonc] 26/9/2018 08:32

What!!!

You think that the company can buy and sell shares on its own account to make a profit.

Blimey O'riley.

Short to zero.

[barkboo] 26/9/2018 07:26

Off piste - I would never give a tip...just point readers in a direction I think will help. Just like Digi and Gadgi did for me here.

I have mentioned the stock SAR several times as a small stock with huge potential - I think the news today could and should lift it to that recognisable position..I hope a few of you had a look?

I paid silly money for a very nice holding - Rocket Fuel laughed at my investment that is already 40% to the good - today could be hotter than the sun here...but with these markets and gangsters looking to get in after news, you can never tell?

RTHM to continue today - kerchinggggg!

[jonc] 26/9/2018 07:10

Lol.That has been the defacto business model for years.Buying a ragtag and bobtail clutch of businesses and seeing each one decline before impairing the goodwill as each one fails.Short to zero.

[jarvis4] 25/9/2018 23:26

I see Mark Bonney is named as investor contact. The clear out of the old guard continues.
Good to see confirmation that the company is focused on enhancing shareholder value plus we have the clearest statement yet that the focus remains on growth through industry consolidation.

Personally I would like to see them throwing off cash and growing their cash pile first. Maybe, once they have had their hands down the back of the sofa and they have given us the actual figures, we might just see that. At the start of exciting times once again?

[1gw] 25/9/2018 23:19

Well to see it "fly" I think you would need investors to believe that this is confirmation of a viable profitable business model. That even without "organic" revenue growth they now have the critical scale and the management skills to buy sub-scale companies relatively cheaply, integrate them taking out cost and low-margin operations, and produce incremental profitability. If there is a long tail of sub-scale adtech businesses looking to be consolidated then that sort of model could have a long runway of growth ahead of it before it needs to find genuine organic growth.

[gowlane] 25/9/2018 22:34

Yes it would seem that to make those numbers Opex has to get cut quite hard. They were evasive about that at the FY18 presentation Q&A too.

Of course job cuts and restructuring must be a sensitive issue but you would think that it would be all over Glassdoor for example if large numbers were being laid off.

But job cuts will not grow revenues I would imagine, so it looks like another acquisition might well be on the cards here.

The H1 report might have some answers, but I don't see this one flying in the meantime, no revenue growth and a likely H1 IFRS loss coming up, in my opinion.

[kendonagasaki] 25/9/2018 22:18

Personally i've always thought of mahogany as a superior wood.Always reliable whenst bashing in a skull or two.That aside, the weather forcast shows no rain and a bally good 20 degrees over the next few days. A good time to do some weeding and the like?

[1gw] 25/9/2018 22:12

Well I do think we'll see opex come "down" pretty materially, although they were very coy (actually, outright evasive) at the AGM about what the baseline for the 20% reduction target was. The question is how big the exceptionals will be for the opex reduction? I'm hoping not too much given they talked about the initial $12m (or whatever) from the YuMe merger at a cost of no more than $1m in one-off costs (from memory). But I guess other savings might not be as cheap to deliver.

[gowlane] 25/9/2018 22:07

Cheers 1gw, looks like you had the H1 revenues sussed out as well then.

But I must admit that I find it hard to get above 44% overall margins there even with $13m a month in YuMe revenues at 50% margins.

True enough they have always said that they find it hard to give revenue guidance, although other ad techs like Criteo seem to do so.

But intriguing that they seem to be able to guide towards adjusted ebitda and managing to that number, at least they did in FY18 anyway.

[1gw] 25/9/2018 21:45

And finally, a couple of reasons why I've been focusing on adjusted EBITDA:

1. Revenue is still IMO hugely unpredictable. The company itself admits this. Brian made a comment something along the lines of "every time we try to forecast the 3 key variables (volume, fill rate, price) we get them wrong" and Mark Bonney, at the AGM, made the point that there was no significant backlog of orders to model from so it wasn't like a more traditional business where you could expect to build fairly accurate predictive models.


2. I have observed that they seem to have been guiding and managing to adjusted EBITDA over the last 2 years. They did the adj EBITDA breakeven 2 years ago and the $14m last year. You can argue about what the $14m should have been with the acquisitions but I think they were prepared to manage to close to the original guidance given they'd done 2 big acquisitions - i.e. they didn't chase adjusted EBITDA once they could see the target, preferring instead to optimise the business for the future. This year was the real test, with a chunky adjusted EBITDA expectation of $50m-$60m or so, which should bring with it good operating cashflow and bottom-line profit. It was clear from talking to Eric at the AGM that he was focused on profitability not revenue, and as adjusted EBITDA is really the only metric R1 seem to have used for (profitability) performance tracking, I think this was what he meant.

I do think they might move away from adjusted EBITDA and towards "adjusted profit" / "adjusted eps" now that they seem likely to have some this year.