Rhythmone Share Discussion Threads

[sikhthetech] 11/6/2017 20:32

The end of online ads is probably coming, but it's not what you think

Tech giants will be at a great advantage

[geheimnis2] 11/6/2017 19:59

Great stuff barky!

Agreed!

As you were

G2 x

[1gw] 11/6/2017 19:58

I thought you were arguing that the gap between adjusted EBITDA and profit might vary with revenue though?

[gowlane] 11/6/2017 19:46

Well I don’t think it all that unreasonable 1gw, to conclude that if gross profit varies with revenues, then operating costs and 'adjusted ebitda' might well vary too, especially when they have actually done so over a recent 5 year period.

Not using it as a (sole) predictor but one of several looking at trends and how they might extend to the future. Gross profits to revenues (33%) versus costs to revenues (40%?) being another example.

You believe exceptional costs should reduce? Well maybe, pvmg has dropped out of course (we lose the $1.3m positive ebitda as well there) but something else could easily take its place, Perk seems a likely contributor. 1R/Blinkx have always been this way.

Good point though about the ebitda bridge in the results presentation, when you put it together with the schedule in the annual report on exceptional costs it seems to add up.

[barkboo] 11/6/2017 19:42

Hi Geh - yes scaffolders have enjoyed a little RSA, and now look to put pressure on the RTHM share price next week.

Very difficult to beat gangsters - very satisfying when achieved!

[barkboo] 11/6/2017 19:30

Stocky - hotel, apartment?

[barkboo] 11/6/2017 19:07

Stocky were are you staying in Cannes?

[geheimnis2] 11/6/2017 15:15

Interesting thought, stocky!

No doubt lots of 1R chatter in Cannes as ever?

Off on hols again in a few weeks!

Currently in Skegness with my Trabant of course...wibble wibble

[stocky] 11/6/2017 10:54

Shenanigans! It's maybe a broker holding the moody stock?How are you, Ge2? All is well here in Cannes. Blue skies and good food.

[geheimnis2] 11/6/2017 08:11

A lot of moody stock out there keeping a lid on the sp?

Just a thought?

[1gw] 10/6/2017 16:10

gowlane - R1 produce an "EBITDA Bridge" in their results presentations. For example, slide 10 in the FY17 full-year results presentation:

+$1.4m Adjusted EBITDA

-$9.1m Exceptional costs
-$2.0m Share-based compensation
+$1.2m Income tax credit/finance income
-$10.2m Amortization & depreciation

-$18.7m Net Loss

In terms of trying to predict the future, I don't see why the gap should vary with revenue particularly?

We could hope that exceptional costs will be lower in absolute terms in FY18, now that we have "fundamental transformation complete". $3.9m of the $9.1m was the loss on dispoal of PVMG assets. There may still be some exceptionals associated with integrating Perk, and some to do with evaluating potential acquisitions or integrating any acquisitions completed in FY18, perhaps even some to do with tidying things up post-disposal/closure of the non-core stuff, but R1 ought to be beyond the era of big exceptional costs I would hope.

Amortization and depreciation probably isn't going to change hugely for FY18. Apart from the internal D&A, they have a fair chunk of purchased intangibles sitting on the balance sheet which will need amortizing, including a whole year of Perk intangible amortization and then any additional from FY18 acquisitions.

The share-based compensation charge will vary in part I think with the share price. So a big increase in the share price would increase the value of share options and awards and I think lead to a higher charge. In particular, if the share price crosses 50p for the required length of time then some of BM's 7m share option award will be exercisable which may bring it into account for FY18.

They are likely to have some more finance income in FY18 I would have thought, but IF they get to profitability from a tax perspective then they might have a tax charge rather than a tax credit.

But overall, I would have thought reason to expect the gap between adjusted EBITDA and bottom-line profit to reduce in absolute terms for FY18 vs FY17, principally because of a reduction in exceptional costs.

[gowlane] 10/6/2017 14:07

For the 5 years from FY2011 to FY2015, (skipping the big write off in FY2016) take the difference or the gap between ‘adjusted ebitda’ earnings and actual real bottom line net profit, and calculate it as a % of revenues. It has averaged 5.6% over that period

You might expect it to be reasonably consistent, within a range, but last year, over the full year, that gap widened to 11.5%, over double the average, that’s a big move.

It was 10.4% in H1, so unless our new CFO re-wrote H1, he must have managed to push it up to 12.5% in H2 to get the average of 11.5% over the full year

So going by that metric, if they do $220m revenues in FY18, and show $15m positive ebitda as they are guiding, what might bottom line net losses be?

If the gap is 12.5% of revenues, then we might expect that the net loss will be $27.5m less than Adjusted Ebitda on current trends

That would make it a bottom line net loss of $12.5m in FY18

Be careful with this one. Not in too deep, keeping some powder dry until they ‘show us the money’

[gowlane] 10/6/2017 13:48

I wonder if there is a correlation between the size of directors pay packages and the use of grossly inflated 'Adjusted Ebitda' profits?

Looking at some other company reports recently I see that it is not uncommon for them to include a schedule reconciling this ‘adjusted ebitda’ business with operating profits. So you can see exactly what they are up to.

But not 1R of course - that might give the game away

But it should be compulsory, the regulatory bodies really need to get a grip on this ‘adjusted ebitda’ phenomenon, aka ‘Liars Profits’.

But recent trends contain some clues on how they can declare adjusted ebitda profit for the attention seeking headlines - and still have another whopping great bottom line net loss in FY18.

[kendonagasaki] 10/6/2017 09:47

50% premium above current share price is 63p.Tosca and friends will be busy sooner than later imo.

[sikhthetech] 09/6/2017 15:23

It's been a month since 1R presented at the Numis, 1R's house broker, conference.

The share price has been in downtrend for over 3 weeks...

[alex1621] 09/6/2017 15:01

I thought as R1 is a dollar earner it would do better today?

[leluot3] 09/6/2017 14:48

And where's Rocket Man these days?

Lost somewhere in space!

[sikhthetech] 09/6/2017 14:35

Rocket Fuel Named a Leader in 2017 Omnichannel Demand-Side Platforms Report

[sikhthetech] 09/6/2017 11:15

well, we're in for some uncertain times on the political front...

Maybe the Tories will form a minority govn with possible backing from DUP on a case by case basis??

Interesting situation...

[lance corporal winstanley ash] 09/6/2017 10:42

Is Brian ex Army? He's always talking about boots on the ground!

[lance corporal winstanley ash] 09/6/2017 10:37

Second coming of ad tech

[leluot3] 09/6/2017 10:36

Lance Corporal Winstanley Ash
9 Jun '17 - 10:11 - 6865 of 6865 0 0

I'm still Brian will be pleased.



Could have been written by Brian himself!!!

[lance corporal winstanley ash] 09/6/2017 10:11

I'm still Brian will be pleased.