Reiterating a buy stance on Reach4Entertainment (R4E) just the other day after the Gary Neville acqusition we also noted it is disappointing that there’s been no full-year (2018) trading statement. Now there is a “Year-end trading update” – and it’s very positive news for us shareholders here…
With a ‘strategic overhaul of operations’, Dewynters (London-headquartered entertainment marketing agency) is expected to report growth in revenues and underlying margins with also an improved sales mix, at SpotCo (New York-based entertainment advertising and marketing agency) “operations have stabilised under a new management team” and “the strategy to diversify and build new lines of business is progressing well, following the successful launches of the new agencies during 2018, as well as the recent partnership with Buzz 16”. This all sees “the group expects full year adjusted EBITDA to be significantly ahead of expectations”.
Some caution is needed as adjusted EBITDA is not the same as an improved balance sheet. The announcement does also include “strong year-end balance sheet with net cash of £1.6 million” – the latter compares to £2.5 million at the half-year, though there has since been the launch of the Story House live entertainment-focused public relations agency, following the launches earlier in the year of Dewynters Amsterdam and Wake the Bear (marketing communications for SMEs and venture and innovation arms of large corporates). Looking ahead, “SpotCo is currently working on eight open-ended shows which are scheduled to run through the year and five new productions which the agency expects to begin marketing and advertising during 2019 prior to launching in 2020” and “Dewynters is scheduled to launch four major West End musicals, including two of the largest shows to transfer from Broadway this year in Dear Evan Hansen and Waitress”. Overall, “as a result of the new client wins, a strong project pipeline across the group and the recent acquisition of a 50% stake in Buzz 16 Productions, the board now expects full year profit for 2019 to be ahead of expectations”.
Unfortunately, the announcement doesn’t include what the expectations were or are. On 2017 results then house broker Allenby was looking for adjusted EBITDA of £1 million for 2018, and noting “at this early stage, offering projections for FY2019 are difficult given ongoing restructuring of the business and forecasting of activity levels in the West End and Broadway theatre markets. However, we have a high conviction that organic growth will resume in FY2019”. It’s thus a case of looking forward to more detail with the full results announcement, but we note CEO Marc Boyan only commenced in October 2017 and, having delivered the above already, we continue to believe a doubling of earnings more than possible this year. The shares have responded up to a current 1.15p – but that follows they having fallen from 1.4p as recently as October and capitalises the company at circa £11.5 million. That looks attractive enough on £1 million of earnings but, with clear growth and from a restructured cost-base, on double that and more, looks far too low. We are now further confident in a stance - at up to 1.5p with a target to sell of 3.5p+, of BUY.
Filed under: Reach4Entertainment, Angus Energy, David Lenigas, Tesla, Centrica, GCM, Malcolm Stacey
RISK WARNING & DISCLAIMER - FiveFreeShareTips.com tips are provided by independent authors via a common carrier platform and do not represent the opinions of FiveFreeShareTips.com. FiveFreeShareTips.com does not accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at FiveFreeShareTips.com and via emails you receive from [email protected] are for your general information and use and are not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by the tipsters or FiveFreeShareTips.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Trading shares involves the risk of loss. The tipsters and FiveFreeShareTips.com shall not be liable for any losses or other damages incurred. The value of investments can go up or down and the past is not necessarily a guide of future performance.
Well actually it will be six. One every week day and one on Sunday, each landing with you at 11 AM sharp.
Unlike other services (which may always have a vested interest) we pride ourselves on our impartiality and cover all small caps including AIM. the Standard List, The Wider Main Market and NEX.
We cover small caps, penny shares, FTSE 350 stocks and blue chips. We look for red hot penny shares, Warren Buffett style value investments with yield and growth stocks. There is no technical analysis in our work just solid fundamental analysis from a team of experts with decades of stockmarket experience.
You will not agree with all we publish but if you are interested in small caps you cannot afford to ignore it either. Yo'll never be charged for the free share tips from Five Free Share Tips and given the star writers involved you know that they will move share prices.
There's no telephone number or postal address required and there is no charge, ever, for your Five Free Share Tips membership. Just free shares tips every day apart from Saturday And each day's share tip will not just be a few thoughts cobbled together but will be detailed analysis from experts.
Our experts do not just earn their living from writing. All own shares. If they own shares in a stock they cover they will declare it and will not sell until after advising a sell to our readers. And why not our tips are so good that why shouldn't our readers put their money where their mouth is?
Don't just take our word for it! Judge us on the calibre of our free share tips and join today to start receiving them from September 1 2017. If you don't like what you get delivered to your inbox unsubscribe and you will never hear from us again. So why not give it a go? Sign Up Now
We've put together a panel of top tipsters, including:
Tom Winnifrith, in his 27th year writing about shares, noted fraudbuster & dubbed "The maverick Tipster"
Chris Bailey, City whizz kid turned financial guru, rated as one of the top 50 commentators on shares on twitter, founder of Financial Orbit
Steve Moore, has worked with Tom Winnifrith for all bar 3 weeks of his working life - a noted commentator on value stocks
Malcolm Stacey, The Grandfather of Share Blogging, the founder of ShareCrazy & a best selling autthor of stockmarket books
Lucian Miers, the Bard of the Boleyn, one of the UK's best known short sellers
Gary Newman, writes about value investing on AIM, speciality is in share tips on oil and mining companies
Nigel Somerville, The Deputy Sheriff of AIM, an expert in forensic analysis a skill used to bust frauds but also to tip true value investments
The team from HotStockRockets, specialising in AIM and small cap shares which will fly on a three month view
Remember to book your place at the UK Investor Show 2018. The UK’s top investment show taking place on Saturday 21 April 2018 at the Queen Elizabeth II Conference Centre in Westminster, London. The show will feature a unique line-up of top speakers including Nigel Wray, tech queen Vin Murria, Dave Lenigas, Mark Slater, Tom Winnifrith, Adam Reynolds, Ed, Croft, Nick Leslau Luke Johnson and Dr Johnny Hon as well as 135 exhibiting small cap companies.
The hot share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Conduct Authority authorised Stockbroker or Financial Adviser. We cannot be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips. The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited. The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Some of the shares recommended on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). FiveFreeShareTips.com & its sister site ShareProphets.com defines a smaller company share as any stock traded on AIM or NEX or which has a market capitalisation of less than £300 million.