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The (very late) release of the FY22 numbers as well as the Q1 23 top-line number are rather disappointing, but this is not the main issue. The outlook points to another tough year and nothing seems to have changed from a commercial standpoint. Far worse, auditors have raised concerns about the refinancing of the group (in September 2023 and FY25). Given the lack of transparency and progress in the turn-around of the group, we stop coverage of the stock.
Companies: Solocal Group (LOCAL:EPA)Solocal Group (LOCAL:PAR)
AlphaValue
The group released a mixed set of figures for Q3 22. The ARPA was stable but churn was on the rise and sales were still down organically. As expected, the group needs more time before growth resumes. We will fine-tune our numbers after this release.
The Q2 22 results were disappointing, particularly at the topline level Margins remain high, but the group has so far failed to return to growth The mid-term targets do not seem to be at risk at this stage, but patience is required We give the group the benefit of the doubt… so far
Q1 22 revenues were in line with expectations, i.e. a tick lower yoy, while the FY guidance was maintained. The churn rate looks under control. The reorganization of the salesforce is making progress It will take more time for growth to resume. Expect no big changes to our numbers after this release.
The activity seems to be stabilising, with both the churn rate and the share of subscriptions up. The profit level boosted by cost-cutting is up and the FCF enables a reduction in net debt. The outlook is not too demanding and the group should “easily” reach its FY 22 targets. Probably no big change to our numbers after the release. The stock remains a bet on the resumption of growth, now that the financial restructuring is behind us.
Q3 21 revenues were in line with the market’s expectations Some KPIs (churn rate, subscription rate) sent positive signals The mid-term targets look rather conservative to us We will not change our numbers much after this release
H1 21 numbers roughly in line Revenues are stabilising while margins look fine The group will present its strategic roadmap on 20 October It will take some time for the group to get back to growth
The Q1 21 revenues were in line with expectations The customer basis is starting to stabilise with the churn rate decreasing We expect a resumption of growth in H2 21 and, most of all, FY22 We will not change our estimates after this release
The FY20 results came in line with expectations The group is still impacted by the pandemic The churn rate, albeit stabilised, remains too high Not much to expect for FY21, which will be a transitional year before growth resumes
- Q3 revenues showed an (expected) drop yoy - digital revenues were in line with our expectations - The group confirmed its FY20 guidance - No change to our forecasts
Companies: Solocal Group
The group has been able to save its EBITDA thanks to cost cutting On top of long-term steps, new short-term cost cutting has taken place due to the pandemic The group’s target appears within reach The ongoing financial restructuring will (at last) enable management to focus on the day-to-day business
The financial restructuring, if approved, will end up in a massive dilution of existing shareholders. We calculate that the value of existing shares could reach as low as €0.072, while the psychological impact of the deal could bring it even lower. Solocal’s history proves again to be a complex one, with hopefully a sound financial structure at last post restructuring…provided the pandemic comes to an end soon.
Q1 revenues ok, considering the COVID-19 crisis started in March The outlook looks gloomy, most clients being deeply impacted Visibility is very low, and will stay so for some time It remains to be seen if the group can manage without a capital increase
Payment of the Q1 bond coupon cancelled. The COVID-19 crisis will massively weigh on the group’s businesses. Cost cutting and capex postponement on the cards. Visibility is getting close to zero. We believe the group can’t avoid a capital increase despite the low share price.
FY19 results in line with expectations More time needed for top-line growth to resume more markedly FY20 targets look reachable and the financing looks ok The turn-around seems under way, but the road is still long
Research Tree provides access to ongoing research coverage, media content and regulatory news on Solocal Group. We currently have 8 research reports from 2 professional analysts.
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
Companies: S4 Capital plc
Edison
S4 Capital reported FY23 EBITDA of £93.7m vs DCe £89.6m and we retain our lower end 2024 forecast for £90.2m.
Dowgate Capital
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
Companies: Team Internet Group plc
XLMedia has announced the sale of its Europe and Canada sports and gaming assets to Gambling.com Group for a total consideration of $42.5m ($37.5m fixed, $5m earnout). The sale is in-line with its recently stated strategy to maximise value for shareholders including the disposal of assets where opportunities arise. The proceeds will be used to settle outstanding tax and acquisition liabilities, invest in the US business and return significant sums to shareholders. Applying peer multiples to the
Companies: XLMedia Plc
Cavendish
We are reiterating our Buy rating and $0.25 price target for Starco Brands with the company announcing 4Q23 (December) results after the close on Monday. We believe 2024, with a full compliment of unique, value-added brands which leverage Starco's aerosol and marketing infrastructure in hand, and a laser focus on adding key categories and new relationships, is shaping up as another year of material progress for Starco. We believe there are also continued margin expansion opportunities from both
Companies: ELF EL STCB EPC COTY IPAR DGE IPAR EL UNILEVER EPC STCB ELF COTY
Small Cap Consumer Research LLC
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
Zeus Capital
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
Companies: JDW MAB MARS WTB FSTA BOWL CPG SSPG LGRS SSTY OTB HSW TMO GYM MEX
Liberum
Companies: EBQ NFG SAA SFOR
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.
Companies: STV Group plc
Progressive Equity Research
Companies: Mission Group Public Limited Company
Canaccord Genuity
Companies: DUKE NEXN BOOM
The Great Correction of 2022 saw the share prices of streamers plunge after market leader Netflix reported a slowdown/fall in subscriber growth. Having formerly been seduced by hectic subscriber growth rates, investors quickly refocused, this time on fundamental metrics such as revenue, margins, profits and cashflow. Since then, streamers have continued to take a steadily greater share of viewing while linear TV continues to decline. But growth in streaming subscribers in the US and UK is now a
Companies: AMZN DIS WBD NFLX NFLX ITV STVG PARA AMZN DIS
Hardman & Co
Companies: Eagle Eye Solutions Group PLC
Shore Capital
WPP’s capital markets day (CMD) focused on the combination of creativity and AI at scale and how these can be leveraged to boost clients’ businesses. Outline Q423 performance figures were given, along with updated forward guidance, including on restructuring costs and potential payback. We expect market expectations to be broadly unchanged. The overarching narrative of consolidation and simplification, common data platforms and standardised reporting, is coherent and supports the projected margi
Companies: WPP Plc Sponsored ADR
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