Technicolor’s Q121 figures show (constant currency) revenue up 3.6% on prior year, buoyed by continued strong demand in Connected Home. The outlook for Production Services is considerably improved as filming gets underway and projects are greenlit. Full year and FY22 earnings guidance is maintained, with margins set to improve after earlier streamlining and ongoing cost control. Following FY20’s financial restructure, the equity proportion of Technicolor’s enterprise value is no longer greatly o
Companies: Technicolor (TCH:EPA)Technicolor SA (TCH:PAR)
Technicolor’s FY20 results show it is on track to meet FY22 guidance, now adjusted for forex and the disposal of the post-production business. FY21 trading prospects are improved, with 75% of Production Services’ pipeline in place. Strong domestic broadband demand continues to buoy Connected Home, although the FY21 result may be dampened by delays from semiconductor shortages. Our forecasts align with guidance, which is for a marked margin uplift as revenues rebuild and the cost saving programme
Technicolor has announced the disposal of the post-production house of Production Services for €30m, for completion in H121. This leaves the segment focused on VFX (visual special effects) and animation, where growth and margin prospects are higher. FY21 has a good project pipeline, with around two-thirds of the year’s expected film and episodic VFX sales in place. No group level update was given, although Connected Home recently passed the milestone of shipping 20m DOCSIS 3.1 boxes. We have mad
With the financial reconstruction complete and the group’s credit ratings upgraded as of end-September, Technicolor is now focused on improving its underlying profit and cash generation. The Q3 narrative was in line with earlier updates: Connected Home benefiting from the strong demand for reliable home broadband and Wi-Fi; Production Services seeing a partial resumption of live action filming; and DVD Services held back by the lack of new releases. Run-rate targeted cost savings have been edged
With its complex financial restructuring complete, Technicolor can now move forward secure in the knowledge of a supportive equity- and debt-holder base. With US Chapter 15 proceedings now closed, both S&P and Moody’s have lifted their ratings, the former to CCC+ with stable outlook (B for the new debt), the latter to Caa2 (Caa1 for new debt), which should help improve commercial terms of trade. The rights issue was taken up by 18.1% of equity holders, at €2.98, above the prevailing market price
Technicolor’s H120 results are consistent with management’s base level guidance given ahead of the EGM to approve the refinancing. Our model reflects this scenario. The proposed rights issue and debt-to-equity swap are now set to proceed, launching in August, closing in September. The share price has been rebounding towards the €2.98 rights price for equity shareholders, underwritten by the debt holders, who will pay €3.58/share. With firm steps now taken along the route to a much-strengthened b
Technicolor has negotiated a refinancing with its lenders, to be put to shareholders at an EGM on 20 July. This involves an initial injection of €420m of additional debt, in part to repay a bridge loan expiring at the end of July, to be followed by a €660m debt-to-equity swap. Shareholders will have the chance to participate in this element through a rights issue priced at €2.98. Management has outlined trading scenarios for a base case and a high case through to FY22e, both of which reflect the
The impact of the COVID-19 pandemic on equity markets has interfered with Technicolor’s plans to refinance the group in part through a €300m rights issue, as was announced in February 2020. Management is now seeking an alternate solution to enable it to move ahead with the strategic plan unveiled at that time. It is seeking a conciliation with its creditors to facilitate negotiations with a third-party investor and one of its existing lenders that will inject €400m into the business, to be follo
Technicolor’s Q1 results reflect limited COVID-19 impact, which will show more markedly in Q2. Q1 disruption to Connected Home’s Chinese supply chain is now broadly resolved, while lower activity in Production Services’ Film and Episodic visual special effects (VFX) had been flagged previously. Connected Home is seeing good US broadband demand, while Production Services is being hit by the industry’s cessation of live action filming. The group is on track to achieve run-rate cost savings of €100
Technicolor has issued a further update on how COVID-19 is affecting the group, having withdrawn guidance at the time of the AGM in March. With studios and advertisers halting all live action filming, Production Services is the most affected segment. DVD services has fair demand for its back catalogue, with production continuing for now, while Connected Home is building back up to speed as its Asian supply chains recover. We have withdrawn our forecasts while the economic picture clarifies. The
Technicolor’s new CEO, Richard Moat, appointed in November 2019, has completed his review of the group. He has now set out his strategy to play to the group’s commercial strengths and put it on a firmer financial footing. More detail will be added at a capital markets day scheduled for 19 February. Cost savings of €150m have been identified (an additional €110m to those already being implemented, and at an implementation cost of €90m over three years) and an underwritten rights issue of €300m is
Technicolor has announced the appointment of Richard Moat as CEO, taking over from Frédéric Rose, who had been in situ for 11 years. He is a turnaround specialist, with a telecoms background, and is tasked with accelerating growth, value creation and financial sustainability. The Q3 trading update indicated improvements in adjusted EBITDA and free cash flow, as anticipated. We have made minor downward adjustments to our full year and FY20 forecasts to reflect the shift in mix. The valuation rema
Technicolor’s H1 results were in line with management expectations and we have made only minor adjustments to underlying forecasts (numbers now reflect implementation of IFRS 16). Work on The Lion King contributed to a very busy H1 for Production Services, which also has a good H2 pipeline. Connected Home has market leadership in broadband gateway access and has made good progress with its cost saving plan. We expect working capital to swing back to the group’s advantage in H2 and operating marg
Technicolor is a leading global player in each of its three core businesses: Production Services, DVD Services and Connected Home, all of which have challenges and opportunities. Our view is that management has a strategy to mitigate the former and take advantage of the latter. H119 will likely prove the earnings nadir, with capacity constraints in Production Services and component pricing pressure – now unwinding – in Connected Home, which will also be reflected in the cash flow. We expect cash
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Light Science Tech Holdings, the controlled environment agriculture technology and contract electronics manufacturing Group to join AIM. Raising £5m. Expected mkt cap £17.4m. Due 15 Oct.
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Centaur Media’s strong operational performance has continued into H2, with both revenue and EBITDA margin now guided to exceed current market expectations. Outperformance is being driven primarily by the Group’s XEIM (Marketing) segment, where Econsultancy subscriptions ran ahead of management forecasts driven by new business wins, whilst Mini MBA continues to see high double-digit growth (H1’21: 84% y/y). The Lawyer segment has also performed strongly, and is now guided to deliver 7% y/y growth
Companies: Centaur Media plc
Exactly one year ago, the FTSE 100 closed at 5,862, having fallen 100 points on the day, the lowest point since mid-May 2020, due in part, to the strength of sterling vs US$ at $1.34. One year on, the FTSE 100 has risen to 7,119, a rise of 21%, it remains 7% below the peak in January 2020. From an international viewpoint, US and European markets continue to trade at record highs. The US Federal Reserve is close to withdrawing some of its economic support this year as inflation picks up and the e
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As expected, the digital privacy and security specialist has delivered a strong performance in H1 FY21A immediately ahead of its blockbuster acquisition of ExpressVPN, with revenue growth of 62% to $95.5m and adjusted EBITDA growth of 75% to $28.7m (materially consistent with the trading update issued on 20 July 2021). Such impressive trading reflects a circa four-month contribution from Webselenese as well as higher organic revenues for both the privacy- and security-based software solutions. P
Companies: Kape Technologies Plc
Pearson shares are down 12% this morning following the publication of the group’s 9-month trading update. The drop in Higher Education has dampened investors’ confidence.
Companies: Pearson PLC
What a difference a year makes - 12 months ago, the focus, quite understandably, was on the course of the pandemic and the lifting of the Lockdown (1) measures. For investors, it was the sustainability of the rally in markets seen since March 2020. Today, while we are still thinking about the lifting of lockdown measures, we are also concerned about two “old favourites” from previous decades. Inflation and the parlous state of public finances. The BoE has said that although CPI inflation rose to
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Jaywing is an independent, data science-focused marketing services group, operating across Integrated Marketing (c80% of net revenue) and Credit Risk (c20%). Following recent challenging years (from Brexit and COVID-19), the company has rebounded and returned to profitable trading via a recent restructure and a resurgence in corporate marketing spend post H1/20, particularly in digital. We re-issue forecasts today, initially for FY22E, expecting +£1.6m (+229%) of YoY growth in underlying adj EBI
Companies: Jaywing plc
Tremor has announced that it has achieved Q2 21 organic net revenue growth of +159% to $73.7m, and adjusted EBITDA of $37.3m at a margin on net revenue of 51%. Tremor’s Programmatic division and its CTV revenue are driving its remarkably strong organic growth with +196% and +280% yoy respectively. Following the company’s June 2021 US IPO, it has achieved a Q2 21 performance that is ahead of all of its US-listed peers’ organic revenue growth of +61-101%, with adjusted EBITDA margins of 26-42%. To
Companies: Tremor International Ltd.
Kape has announced the sensational acquisition of ExpressVPN, a well-respected rival, for a total consideration of $936m, payable in cash and shares, subject to conditions. The dramatic move doubles Kape’s subscriber base (to c. 6m), delivers significant earnings accretion and marks another tour de force moment for the Group and its shareholders (following on from PIA in 2019 and Webselenese in 2021). Completion is expected to occur in Q4 2021. ExpressVPN represents a bullseye for Kape’s acquisi
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Eurowag confirms its intention to undertake an initial public offering on the Main Market (Premium). The Offer would be expected to comprise both (i) new Ordinary Shares to be issued by the Company, raising gross proceeds of approximately EUR200m to support Eurowag's growth strategy and (ii) existing Ordinary Shares to be sold by existing Eurowag shareholders. Eurowag is a leading pan-Europe
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CAP-XX Ltd* (CPX.L, 5.8p/£29.5m) Finals: Sales order book up more than 160% (29.09.21) | MTI Wireless Edge Ltd* (MWE.L, 70p/£62.0m) Contract win: MTI Summit secures multi-year customer agreement (30.09.21) | Mirada plc* (MIRA.L, 65p/£5.8m) Finals: Considerable pipeline of sales opportunities (29.09.21)
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YouGov has issued a detailed trading update ahead of its full year results, now set for publication on 19 October, post a slight delay on finalising the tax position. Revenues of £169m are up 18% on an underlying basis, with an improvement in adjusted operating margin from 14.3%% to 15.1%, broadly as expected. YouGov also announced the acquisition of UK adtech company Rezonence (price undisclosed), which should facilitate data acquisition from a wider range of participants beyond panel, at lower
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Centaur’s trading update, issued alongside its capital markets day, indicates good progress in H221 to date, building on the post-pandemic recovery in revenues and margin reported for H1. We have edged up our expectations, particularly on the pace of improvement in EBITDA margin towards the FY23 management target of 23%. The share price has held the gain made after the interim results and is now up 68% year-to-date, yet the rating remains at a discount to peers.
This is our first report on Troika Media Group and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years. Advertising and brand building as an industry had been negatively impacted by the Covid-19 as corporates slashed budgets on account of the global lockdowns. However, there has been a pent-up corporate demand in this regard and companies appear to be increasing their budgets rapidly as the world recovers from the aft
Companies: Troika Media Group, Inc.