S4 Capital - Extension of recovery horizon

S4 Capital had a difficult FY23, as flagged, with reduced client confidence and spend, particularly from those clients in the tech sector, and on larger transformation projects. Management is cautious in the short term, with no substantive changes likely in H124, but sees conditions likely to improve in H224 as economic pressures ease. The group’s longer-term prospects should be buoyed by its positioning across data and digital marketing and, in particular, in incorporating AI into hyper-persona

S4 Capital FY23 Results Update

S4 Capital reported FY23 EBITDA of £93.7m vs DCe £89.6m and we retain our lower end 2024 forecast for £90.2m.

S4 Capital FY23 Results Preview

S4 Capital will release FY23 results on 27th March. We maintained our EBITDA/EPS estimates of £90m/4.7p at the January update which are predicated on a LFL net revenue decline of -4% and EBITDA margin of 10.3%, with the latter supported by the c20% reduction in headcount.

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S4 Capital FY23 Trading Update

S4 Capital has reported a FY23 Trading Update which states that trading was in line with expectations and debt is at the lower end of guidance.

S4 Capital Q3 Trading Update

S4 Capital has reported Q3 revenues below expectations and lowered FY guidance; we reduce our FY LFL growth by -150bp to -3% and EBITDA margin to 10% (was 12%).

Efficiency, Returns and Alignment

At its recent results, S4 Capital indicated its key focus will be to improve efficiency and drive shareholder returns.

Interim results

S4 Capital has released interims that are in line with the July Trading Update though the group cautions that trading has become more challenging and it lowers its LFL guidance from +2-4% to ‘likely down' and EBITDA margin from 14.5-15.5% to 12.0-13.5%.

Feedback from Digital Disruption Conference

On 12th September, Dowgate Capital and FTI Consulting held the third annual Digital Transformation Conference. In a wide-ranging conversation with Rory Cellan-Jones, Sir Martin Sorrell gave an overview of the geopolitical outlook and the opportunities from digital technologies, notably generative AI.

Pre-close Trading Update

S4 Capital has released an H1 Trading Update that indicates slower LFL growth has resulted in EBITDA and margin being below budget and has lowered FY guidance from LFL growth of 6-10% to 2-4% and Margin from 15-16% to 14.5-15.5% and we therefore reduce our EBITDA and EPS forecasts by -9% and -11%, respectively.

Feedback from Generative AI seminar

S4 Capital held a seminar on Generative AI which reproduced the content from conversations that it had with clients at last week's Cannes Lions Festival of Creativity in which it highlighted its determination to ‘go all in' on AI and be ‘first and fastest'.

AGM Statement

S4 Capital has released an AGM statement which confirms that trading remains in line with expectations and consistent with the recent Q1 update.

Q1 Trading Update

S4 Capital has reported Q1 net revenues of £219m, slightly ahead of DCe £209m, with LFL growth of +7% (+8% ex-Mondelez) and has reiterated its FY guidance for 8-12% growth and EBITDA margins of 15-16%.

FY22 Results Update

S4 Capital has reported FY22 results slightly ahead of our forecasts and we broadly maintain our EBITDA forecast and trim PBT/EPS due to higher interest charges.

FY22 Trading Update

S4 Capital has reported a very reassuring FY22 update that indicates LFL revenue growth was in line with expectations, EBITDA will be ‘at least' £120m and net debt will be at the lower end of guidance.

LBG Media (LBG LN) - Strong momentum into FY24

Resilient growth in core markets: Revenue of £67.5m is +7.5% YOY (FY22: £62.8m) and +0.7% vs. Zeus estimate of £67.0m, with growth across Direct and Indirect divisions benefitting from increased activity with new and existing clients.

Next 15 Group - Baked in AI opportunities

Next 15 Group's net revenues grew 2.5% in the year to January, despite difficult markets. Adjusted operating margin rose from 20.2% to 21.0%, helped by head office cost savings. In common with much of the sector, spending by tech clients was soft, down 17% like-for-like. The group did well, though, in growing spend from non-tech clients, up 11%, making for a strong overall performance in a market beset by ongoing macro uncertainty. Next 15 has been building its AI capabilities for some time and

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Team Internet Group - Growth and returns, acquisition bolsters outlook

Team Internet’s FY23 results exceeded our forecasts and consensus on revenue and EBITDA. Online Marketing was driven by increased consumer engagement, reflecting investment in delivering more targeted ads across a wider array of channels. The group’s latest acquisition, Shinez, strengthens Online Marketing via diversification of publishers and is earnings accretive with scope for further synergies. Online Presence returned to strong revenue growth, driven by demand for exotic domains, pricing op

Nexxen - Q4 results +2-4% ahead of cons, FY24E forecasts +3-4% ahead

Nexxen has announced Q4 net revenue +2% ahead of consensus, Q4 adjusted EBITDA +4% ahead of consensus, and FY24 guidance that leads our FY24E revenue and EBITDA to be +3% and +4% ahead of consensus. Q4 net revenue of $90.5m is +2% ahead of Q4 consensus of $88.5m, with the Programmatic division’s $86.0m of net revenue delivering 95% of group net revenue. After successfully realising $65m of annualised synergies from the Amobee acquisition at Q2 23 results, strong cost control has driven Q4 adjust

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Team Internet Group (TIG LN) - Record results

Team Internet’s FY23 results confirmed another strong year of trading from its Online Marketing and Online Presence businesses. Both revenue and EBITDA growth remained in double digits, margins on net revenue continued to improve, and cash conversion remained strong. We continue to believe that the Group has substantial long-term growth opportunities including international expansion, new partner development, and vertical integration. In our view, Team Internet’s strong track record, cash genera

Team Internet Group (TIG LN) - Online Marketing bolt-on

Following the record FY23 results announced yesterday, Team Internet announced an accretive bolt-on acquisition for an initial consideration of $42m. The Group is continuing its strategy of making accretive bolt-on acquisitions, aiming to diversify its revenue model and expand its traffic monetisation options and capabilities. The deal is expected to complete in late May 2024, at which point we will incorporate the impact into our forecasts. We continue to believe that Team Internet’s strong tra

STV Group+ (STVG, House Stock at 235p) - Recent news extends positive momentum

Morning Note – 6 March 2024

Next 15 - FY24 Full Year update

If one focused solely on the share price chart, it would appear Next 15 had experienced a near death experience in 2023 with multiple, and extensive downgrades. The reality has been somewhat different. Next 15 will exit FY24 delivering both top line growth and year on year margin progression.

PROGRESSIVE: STV Group: Supportive contract wins

A first commission for Netflix and a material extension of an existing commission for Warner Bros. Discovery highlight continuing strong momentum in 2024 for STV’s Studios division. As well as underpinning current estimates, they point to a continuing broadening out of the client base and scope of work at STV Studios, as the group continues its long-term migration from a traditional broadcaster to a digital streaming and content provider.

Initial Equity Trading Comments - 16 May 2023

The Joy of Techs - Cavendish Technology quarterly sector note

£23.3bn in enterprise value has been returned to AIM technology shareholders over the past six years in the form of 51 public to private takeouts, including 10 in 2023 alone with the takeovers of Smoove* and Tribal announced in early October. With UK valuations appearing cheap and looking more attractive to potential acquirers, we take a moment to reflect on the trends of corporate and private equity bidders targeting AIM-listed technology companies going back to 2017, through the uncertainties