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What do my streaming choices say about me?

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If we are what we watch, then this column was written by Jerry Seinfeld, or maybe Tony Soprano. Or a combination of the two, although I’m not sure Tony Seinfeld sounds menacing enough to cut it in the New Jersey mob.

People have always perceived social cachet in their cultural choices. So what do your viewing and subscription habits say about you? To be clear, we are talking about mainstream channels here. You know what your OnlyFans sub says.

So who are you? Are you a Paramount Plus type? Or maybe a Disney devotee. Perhaps you’ve kept that Sky subscription because you are only on season 13 of Grey’s Anatomy and still have another 700 episodes to get through.

There is no longer the same unified community of television that existed when there were only a handful of channels. You could once be confident that almost everyone like you watched the same shows and understood the same references. This is why a generation of Gen X or boomer men will offer entire renditions of Python sketches the moment a keyword is uttered. Anyone foolish enough to observe that they did not expect the Spanish Inquisition will immediately deserve to be tortured with the reminder that its main weapons are surprise and fear, oh and ruthless efficiency — see what I mean?

Today word of mouth, or word of TikTok, is even more essential. But how many streaming services are you prepared to pay for? It is fairly easy to join up and cancel once you’ve watched the show that interests you. But it is also fairly easy to forget to cancel.

So what do your choices say about you? Netflix says relatively little except that for some reason you carry on paying even though you sit there night after night complaining that there is never anything you want to watch, aside from reruns and the movies of Jason Statham.

An Amazon Prime subscription probably means you paid for the free priority postage so thought you might as well take a look. You also like being able to watch only one leg of European football matches.

Disney+ means you have small children or essentially still are a small child. Adults with Disney+ and no children are obsessed with spin-offs from the superhero series or Star Wars. You are absurdly excited by the new Avengers movie. Alternatively you once nicked a password from a friend to watch the Beatles documentary and have hung on to it, telling people you only keep it so you can watch The Bear.

A commitment to Paramount Plus means you are a sucker for soap operas about grizzled, old, salt of the earth no-nonsense ranchers. Or perhaps oilmen who are fighting back against bureaucrats, regulators, lawyers and environmentalists who are threatening their way of life — and whose wives spend all day shopping and glamming up for when they get home. Maybe that’s slightly unfair. There are also series about good old salt of the earth gangsters whose way of life is threatened too. Paramount Plus is a channel for men who miss westerns. It is essentially the GB News of light entertainment, the channel for everyone thinking of voting Reform at the next election and who suspects that Jeremy Clarkson is secretly a bit of a leftie.

Now TV is for people who did not want to shell out for a Sky subscription and haven’t realised it would have in fact been cheaper to have done so.

You got Apple TV+ during the pandemic and are prevented from cancelling by the fact that its four good shows are evenly distributed throughout the year.

Discovery Plus has a bit of everything you like, especially cycling, but not enough to justify a subscription so it’s primarily for those who don’t care how much they are spending. Channel 4’s is the saddest service since it exists solely for those who want to rewatch programmes from when Channel 4 was still good.

ITVX is primarily for those who feel short-changed by only two hours of Love Island content. As for iPlayer, well, it’s the BBC and you’ve probably paid for it anyway so you might as well give it a quick skim, if only to annoy The Telegraph.

Oh, and if you actually watch any of these on your TV, I regret to inform you that you are no longer young.

Email Robert at magazineletters@ft.com

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Rewards await for patient investors in UK small techs

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It may seem a rather curmudgeonly, and premature, caveat in a week when US AI chip designer Nvidia hit a new record valuation for any listed company ($4tn), to warn that investors cannot assume that star performers will always deliver flawlessly in the future or remain at the top of their industries.

Certainly, investors with a zest for tech are always on the lookout for the next big name, an innovative competitor, changing market conditions and new opportunities. While hugely successful companies such as Apple, Microsoft and Nvidia have had a lasting and transformative effect on the world, they all started life as unknown entities. For the first two decades of its existence, Nvidia focused on improving graphics for computing and video games. 

Britain has a good record in tech and innovation — Arm, Darktrace, Avast, FD Technologies, Wise, Sage and Oxford Nanopore among them, although only the last two retain their primary listing in London — and the market boasts many other quality stories. Raspberry Pi, one of the newest arrivals, makes low-cost, high-performance computing platforms. Among cyber security and fraud detection specialists are NCC and GBG. Others, such as consultancies Bytes Technology, which is Microsoft’s reseller in the UK, Softcat, Iomart, Kainos and Computacenter, offer software and hardware services to businesses and the public sector.

Software businesses include Alfa Financial which sells its asset finance software to carmakers such as Mercedes-Benz, and Cerillion, which supplies specialist billing and relationship management software mostly to telecoms companies globally. Celebrus Technologies specialises in digital identities and data — helping businesses to recognise and understand their customers in a digital world.  

These firms may not command the premiums of the Magnificent Seven and are often punished harshly for the smallest of misses, but returns for patient investors can be excellent. 

BUY: Celebrus Technologies (CLBS)

The software company’s share price has dropped despite a shift towards higher-margin software contracts, writes Arthur Sants.

Celebrus Technologies sells software that allows businesses to track customers’ behaviour on their websites. This is useful for marketing purposes, as it gives businesses insights into how to prompt their customers into spending more. It also helps with fraud protections, as the technology can spot users who are behaving unusually.

It recently announced it has signed two new customers, including a European bank and a US fintech brokerage. The combined contract value of these two is just under $4mn (£2.9mn) and will add $1.1mn in annual recurring revenue (ARR). This brings the group’s ARR to almost $20mn, up from $16.5mn in full-year 2024.

However, last year’s figure was revised down from more than $20mn. This is because Celebrus is now recognising the revenue evenly over whole contracts, rather than front-weighting them. It is always a little concerning when sales numbers are restated, but broker Shore Capital says the changes make the reporting more consistent, and “signal operational maturity and strategic clarity”.

These new contracts were not included in Celebrus’s full-year results, published on the same day. In the year to March, revenue dropped 5 per cent to $38.7mn, but adjusted pre-tax profit increased by 14 per cent to $8.7mn. This growth is due to a shift towards higher-margin software, with the gross profit margin up nine percentage points to 62 per cent.

Since the end of last year, the company’s share price has fallen by 40 per cent. Most of the drop followed a trading update in April, which announced that full-year revenue would be behind expectations due to customers “slowing down” decision-making. However, this means the shares are now trading on a forward price/earnings ratio of 16, down from 24 last year. We think there is more space for margin expansion and, at this more affordable price.

BUY: Jet2 (JET2)

The travel group’s shares have slipped by 8 per cent as a 13 per cent dividend increase and 18 per cent more passengers fail to impress, writes Michael Fahy.

Investors remain nervous about the outlook for Jet2, despite the company continuing to deliver on its targets.

Full-year earnings were in line with forecasts, with the strong sales underpinned by a 13 per cent increase in capacity over the past 12 months, following the opening of new bases at London Luton and Bournemouth. The dividend was increased by 13 per cent, and ongoing share buybacks meant earnings per share came in ahead of analysts’ expectations.

Trading for this year’s peak summer period also remains in line, even with capacity increasing by a further 8 per cent. But the shares still fell by 8 per cent.

One potential area of concern is the fact that some passengers — particularly those on flight-only deals — are leaving bookings until the last minute. This translated into a slightly lower ticket yield per passenger, down 2 per cent year on year to £118.81. Yet the overall number of flight-only passengers increased by 18 per cent to 6.6mn, and the number of package holiday customers (who paid 5 per cent more for their holidays year on year) grew by 8 per cent to just under 6.6mn.

The other concern is whether the growth it has enjoyed in recent years can be maintained — especially given the amount of planes it has on order. It firmed up an order for 36 more Airbus A321 neo aircraft in June last year, meaning it is now committed to taking delivery of 146 owned and nine leased aircraft over the next decade — all of which need to be both filled and paid for.

Admittedly, this is a big step-up from the 127 aircraft flown last summer, and it comes with some sizeable capex commitments — of about £1bn a year from 2027 onwards. But there will also be retirements of older, less efficient aircraft along the way, meaning annual capacity growth will only be about 5 per cent, based on management forecasts, and even then there is a degree of flexibility in terms of timing aircraft deliveries.

Besides, a solid balance sheet suggests these can easily be funded through earnings. Last year, it spent just shy of £400mn on capex as 14 planes were delivered and, even after factoring in a repayment of £653mn of convertible bonds, it still ended the period with positive net cash.

As such, Jet2’s current valuation of eight times FactSet consensus earnings still looks too cheap to us, given its recent performance.

BUY: Begbies Traynor (BEG)

The company reported a surge in cash flows and an eighth successive dividend increase, writes Mark Robinson.

There were no surprises on the release of Begbies Traynor’s full-year figures, which were broadly in line with May’s trading update.

Adjusted profits for the business consultancy and recovery group were 7 per cent to the good at £23.5mn, and there were no undue problems with the transition through to adjusted earnings, judging by the 6 per cent increase in earnings per share to 10.5p. That is set against revenue growth of 12 per cent, two percentage points of which were attributable to acquired assets. A focus on working capital fed through to a 56 per cent rise in free cash flow to £19.4mn, along with the group’s eighth successive dividend increase.

However, management won’t be altogether content with marginal profitability, which was held in check by a faltering corporate finance market. So, while business recovery and advisory margins were flat on the previous year, property advisory services dragged on the group operating margin — down 60 basis points to 16.9 per cent. And yet activity within the property advisory business remains elevated, with 125,180 UK non-residential property transactions, set against 119,270 in the previous year. Begbies attributes this to an improvement in “transaction levels in October 2024 prior to the UK Budget”.

Chancellor Rachel Reeves’ fiscal endeavours could have a pronounced impact on group volumes going forward. Given the scope of its operations, it isn’t always straightforward to determine whether they will prove positive to volumes or otherwise, though it’s worth keeping in mind that it operates a countercyclical business model.

Corporate insolvencies in the period under review were slightly lower than the previous year but “high relative to historical levels”. There are signs that the additional costs levied on businesses in the last Budget are placing strain on already stretched corporate finances. Begbies is well placed to exploit any step-up in activity within its business recovery arm, as it has boosted capacity through organic recruitment and the additions of White Maund and West Advisory.

Canaccord Genuity has increased its adjusted earnings projection to 10.6p a share, rising to 10.9p in full-year 2027.

With “supportive” market conditions, a growing order book and increased scale, group chair Ric Traynor expects revenue to come in “at the upper end of the range of market expectations”. With corporate UK under intensifying pressure and an apparent move up the value chain, we don’t think a forward rating of 11 times adjusted earnings represents an unreasonable asking price, particularly with an implied dividend yield of 4 per cent into the bargain.



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Amazon’s annual deal fest is no longer all about the bargains

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Amazon Prime Day is often referred to as Black Friday in July. For good reasons. What started out as a one-day event back in 2015 for shoppers to snag discounts on big-ticket items has morphed into an annual extravaganza that is widely copied by other retailers.

Last year’s Prime Day generated about $13.4bn in gross merchandise value over a 48-hour period, according to Bank of America. That’s a 10 per cent increase on 2023 and represents about 6 per cent of Amazon’s online store sales in 2024.

This time round, Prime Day arrived amid concerns that sales would not match the spectacular highs of past years. Consumers are decidedly more cautious. Sellers, facing tariffs, have less reason to offer large discounts. And competition from other retailers — namely Walmart — has increased.

Direct comparison is made trickier this year because Prime Day stretches out over four days instead of two. But in any case, zooming in on sales misses the point. Amazon Prime, and the annual deal bonanza that celebrates it, isn’t just a way of shifting goods, so much as a means of feeding the enormous Amazon ecosystem.

First, the sales themselves have a relatively modest impact on the company’s bottom line. Amazon’s ecommerce business may be massive, with revenue accounting for about 39 per cent of the company’s total last year. But operating profit margins — at 5.4 per cent, Bank of America estimates — are slim.

The real money is therefore in driving customers to all its other businesses. These include Prime membership sign-ups, which give more than 300mn subscribers access to deals others don’t get, plus free shipping and other benefits, in return for an annual fee.

More members mean more spending on Amazon’s marketplace and greater consumption of its services and contents such as video streaming, music and AI-powered assistant Alexa.

Advertising — which Bank of America assigns a chunky 55 per cent profit margin — also gets a boost as brands and third party vendors vie for visibility on one of the biggest sales days of the year. It’s a virtuous circle. The more shoppers Amazon can get on its website, the more data it has to take to advertisers to help them create targeted ads.

Prime Day also tends to attract new third-party sellers, a group that already accounts for 60 per cent of Amazon’s retail sales. Fees collected for services like storing inventory and handling logistics for orders have become Amazon’s second biggest business, generating over $156bn in revenue last year.

The real crown jewel now is Amazon Web Services, the company’s cloud business, which makes up nearly 60 per cent of last year’s operating profit. Put its $126bn of estimated revenue this year on the same 11-times multiple as rival Microsoft, and it’s worth $1.4tn, or over 57 per cent of Amazon’s entire enterprise value. Prime Day may be good business, but it’s no longer the main event.

pan.yuk@ft.com



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Google to agree cloud discount as US government squeezes Big Tech

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Google will heavily discount cloud computing services for the US government, as the Trump administration pressures technology groups to slash prices on long-standing, lucrative contracts.

The agreement comes after Oracle last week cut a deal with the government, including a 75 per cent discount on some software contracts for a limited period and “substantial discounts” on its wider cloud computing contracts.

Google’s cloud contract is likely “to land in a similar spot”, according to a senior official at the General Services Administration (GSA), which is renegotiating the contracts. A deal is expected to be finalised within weeks.

Equivalent discounts from Microsoft’s Azure and Amazon Web Services (AWS) are expected to follow soon, they said, but those talks are less advanced than with Alphabet, Google’s parent company.

“Every single of those companies is totally bought in, they understand the mission,” the senior official said. “We will get there with all four players.”

Together the four companies account for the bulk of the government’s annual spend on cloud services, which currently exceeds $20bn a year.

President Donald Trump’s administration has been attempting to slash the cost of IT procurement as part of a government-wide effort championed by the so-called Department of Government Efficiency (Doge), previously run by Elon Musk.

The tech giants are keen to avoid a repeat of the adversarial relationship they had with Trump during his first term, which saw AWS lose a lucrative defence contract.

Amazon claimed the move was retaliation for critical coverage of the administration in the Washington Post, owned by the company’s founder Jeff Bezos.

The push by the GSA, which co-ordinates US government procurement, follows similar efforts by the Trump administration to reduce the amount spent on consulting groups such as Booz Allen Hamilton and Deloitte.

The senior official said the GSA would also be renegotiating agreements with ridesharing companies that have contracts with the federal government.

Google agreed to give the US government a 71 per cent “temporary price reduction” on some Workspace contracts in April, until the end of September. The company declined to comment on the pending cloud deal.

Microsoft declined to comment. Amazon and Oracle did not respond to requests for comment. A spokesperson for GSA declined to comment on the ongoing negotiations.

The agency’s cost-saving effort, spearheaded by acting administrator Stephen Ehikian and Federal Acquisition Service commissioner Josh Gruenbaum, follows a series of executive orders signed by Trump that mandate the government to save money in federal procurement.

In the past few months, the GSA had reached deals with Adobe and Salesforce. The latter company cut the price it charged the government to use the messaging service Slack by 90 per cent until the end of November.

Big Tech leaders including Meta’s Mark Zuckerberg and Google’s Sundar Pichai have courted Trump — appearing prominently at his inauguration and ending corporate diversity programmes.

Bezos has also worked to rebuild his relationship with the president — whom he previously criticised as a “threat to democracy”.

During Trump’s first term, in 2019, the $10bn Joint Enterprise Defense Infrastructure (Jedi) cloud project was awarded to Microsoft instead of Amazon. AWS alleged in a lawsuit that Trump “used his power to ‘screw Amazon’” due to a “highly public personal vendetta” against Bezos and the Washington Post.

Ultimately, Jedi was cancelled under Joe Biden and replaced with a $9bn contract that was awarded to Amazon, Google, Microsoft and Oracle.

Larry Ellison, the billionaire founder of Oracle, has formed a close alliance with Trump. Oracle is involved in talks to split viral video app TikTok’s US business from its Chinese parent ByteDance, and is part of a $100bn US data centre infrastructure project alongside OpenAI.



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