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When is this buy-back happening??! This share is so depressing. I thought under American management we'd be slicker than this but announcing a buy-back and not doing it is Brian's level! I really hope we are not going to buy something. The share price is less than half what it was before we bought YuMe, I can't face it halving again.
I'm hoping details announced with the TU (assuming we get one in the next week or so) and they start buying the following day. Share your concerns re acquisition activity wagas.
It will be very odd if there isn’t a clear plan for the buyback in the quarterly update.
It would be even better if they also had a plan to get rid of that stinking troll who is determined to destroy this company
Most of the shares are held by institutional investors who would presumably want R1 to offer a premium to part with them. If R1 does indeed offer a premium them the sp should rise.
Such a fixed price tender offer to the Institutional investors would show that the company believes the shares are undervalued.
But where do R1 get the money from? By increasing debt?
Where do they get the money? 31m in cash, 10m buyback proposed.
I seem to remember in July 2017 RhythmOne's 'Reduction of Capital' raised around £140m, as a distributable reserve.
Could some of this be used or is it all 'ring-fenced' for a special dividend one day?
I'd rather have the cash sooner rather than later if that is the case, it seems a lot of money just to be sitting there.
Assuming it is not just an accounting adjustment...
Tricky,
"I seem to remember in July 2017 RhythmOne's 'Reduction of Capital' raised around £140m, as a distributable reserve."
Do you also remember in my post last month I mentioned that I think the buy back had been planned for over a year and only just before the Yume deal was announced, they announced the 'capital reduction'? The Yume negotiations were going on at same time as the 'Capital Reduction'.
Coincidence??
My post 14th Dec 2018:
--------------------------------
I think the buy back had been planned for over a year and just before the Yume deal was announced. I think it was probably part of the Yume deal to have it in place...
The cancellation of the Share Premium account was announced in June 2017, just as they were negotiating the deal with Yume...
So they created $186m distributable reserves..
July 2017:
"The amount standing to the credit of the Company's share premium account has been cancelled and the Reduction of Capital has created distributable reserves of approximately GBP142,825,734 (equivalent to approximately $186,359,256 at the prevailing spot foreign exchange rate as at approximately 4.00 p.m. (BST) on 26 July 2017).
The Reduction of Capital is a legal and accounting adjustment and is not expected to have any direct impact on the market value of the ordinary shares of the Company, or the number of ordinary shares in issue.
The creation of this distributable reserve as result of the Reduction of Capital will afford the Company more flexibility to make distributions to its shareholders, if thought fit by the Directors."
https://investor.rhythmone.com/newsroom/2017/07/27/confirmation-of-reduction-of-capital
fy 2018:
"On 26 July 2017 RhythmOne completed a UK High Court approved capital reduction. A copy of the order confirming the capital reduction has been registered by the Registrar of Companies and as such the capital reduction has become effective. All share premium and merger reserve attaching to the Company's ordinary shares has consequently been cancelled. The purpose of capital reduction was to create distributable reserves to provide the Company some flexibility should it wish to undertake the payment of dividends or undertake a share buy-back program in the future."
https://investor.rhythmone.com/assets/pdf/RhythmOne_FY2018_Results_140618.pdf
Reduction of share premium account
Share premium account
Reduced (or cancelled) by means of a reduction of capital. In accordance with article 3 of the Companies (Reduction of Share Capital) Order (SI 2008/1915), the reserve created on such reduction can be treated as a realised profit and, therefore, it may be distributed to shareholders or used to buy back shares.
Share premium account | Practical Law
https://uk.practicallaw.thomsonreuters.com/1-107-7253
In other words, they can perform a buyback...
The amount of the capital reduction is a bit of a red herring as far as the buyback is concerned.
As I understand it, a company is unable to make a capital distribution (dividend or buyback) unless it is showing retained earnings in the company balance sheet. If you look at the R1 company balance sheet in the full-year accounts it has gone from a retained deficit of £8m at 31st March 2017 to retained earnings of £137m at 31st March 2018, principally through the capital reduction.
i.e. it has gone from a position of legally not being able to execute a buyback to a position of legally being able to execute a buyback.
In terms of financially being able to execute a buyback, though, it is the consolidated balance sheet that is relevant (subject to the distributable reserves limit). So cash and equivalents of $22m at 30th September 2018, and as I understood what Bonney said on the webcast this had become $31m as of the then "latest full week cash report" and was expected to grow further from there as receivables from their seasonally strongest period of business were collected.
So in that context, a buyback program of "up to $10 million" should be eminently doable.
In terms of the timing of the announcement promised in the 13th December release, I have previously said that I thought they were pushing it a bit. i.e. the commitment was to "release full details on the program as soon as they are finalized" and the implication (to my reading) was that this effectively meant as soon as they had received the required consents and met the regulatory requirements. So I couldn't see that they would reasonably need more than 1 month for external consents, even over the Christmas / New Year period.
But I suppose an alternative reading is that their plan is not formally to finalize the details of the program until the board meeting at which they also approve a quarterly TU, even if they have all other consents in place before then.
So still a bit undecided on whether the apparent delay is more likely to be because they have now entered into some M&A discussions which make it difficult to finalize the details, or whether it's just a preferred timing issue and they want to finalize the details at the same time as they approve a TU.
From what I understand that 1GW_ is saying,
R1 is sitting on enough cash to do both a buyback, on the strength of the consolidated balance sheet and a special dividend on the strength of retained earnings.
Both may well be subject to M&A negotiations and of course timing will always be a factor.
I think the chances of a special dividend are around nil in the near-term. I only mentioned dividend because it is another form of capital distribution.
The management did the same at Yume, just before they announced the deal with rthm, so it wouldn't surprise me if they dressed up rthm before selling/merging...
Given the current industry challenges around Data Privacy - (GDPR, California Privacy Law) as well as Apple's ITP and fewer DSPs/SSPs being partnered with, I think M&A will accelerate.
The main difference with regards to a buy back is that it's entirely possible that the BoD are waiting to see what happens around GDPR, California Privacy Law and the costs involved before being able to commit to a buy back.
My 19th Jan post: - note Yume revenues were decreasing and looking at rthm H1 results, look like reduced again...
Referring to my 6th Jan post... I think rthm BoD will do similar to what happened at Yume... dress rthm up and sell..
Yume had falling revenues, had a $10m buyback.. plus special divi and then sold on for around similar sp as before the results and buy back..
Whether Singer does similar here and sells to or buys TAP or any other company is anybody's guess...
Rthm should prove their model and have solid figures and believable outlook before buying anything.
My 6th Jan post:
Just months before the rthm/Yume deal was announced, Yume also announced a $10m buy back.
For fy2016, their results were:
Revenue: $160m (2015 $173m)
Gross Margin 50% (2015 45%)
Cash (and equivalents) $65.7m
Their buy backs were around $3.61-$3.64..
https://www.businesswire.com/news/home/20170216006240/en/YuMe-Reports-Fourth-Quarter-Full-Year-2016
There was also a special divi of $1 a share, just before the rthm/Yume deal was announced...
Yume's last sp on Feb 1, before completion closed at $3.70. Compare that to the buy back prices!
https://finance.yahoo.com/quote/YUME/
Special Divi announcement:
https://www.businesswire.com/news/home/20170622005385/en/YuMe-Declares-Special-Dividend-Quarterly-Dividend
Obviously a buy back will also help INCREASE EPS, which Should come in handy when it comes to reporting "in line" forecast.
I think rthm will possibly follow a similar route.
STT, your long waffly messages fool nobody... meaningless drivel.
STT it's almost a year since TLY said they was going to have a share buy back but you haven't once asked WHY! they still haven't done it so far.
SO why are YOU asking here after just a few weeks?
Not sure why Yume gave a special dividend to its shareholders just before the R1 acquisition, perhaps technical reasons. It would seem strange if R1 gave us all a dividend and then announced a company had tendered a bid for 'our' takeover. Sort of implies that it's compensation: "Here we go boys, a few quid before we're shafted by the marauding pirates."
R1 has a 'free-float' of shares available to the public, on the open market, amounting to approx. 70m.
If R1 were to buy back shares there would be a 'float-shrinkage' of however many £10m would buy, assuming they used that amount.
It doesn't look like Yume's buyback did much for its sp but I also don't know what its 'free float' was prior to their buyback.
Of course a buyback also reduces the reserves available for other activities...
The company has said it expects cash to increase. If the company embarks on a share buy back, it depends on what they do with the shares purchased, i.e keep them in treasury, which could then be used to help with potential purchases, or cancellation of shares so less in circulation.
One thing it should do, is provide a proper marketplace for these shares because supply and demand at the moment is not good. ( in my opinion )
Any share buy back, needs to accompany positive results and cash balances. The rest takes care of itself.