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Friday, May 01, 2009

Informa Takes Steps to Reduce Debt

The debt laden Informa has asked its shareholders for more money to use to reduce it's leverage. It judges that this is better than selling assets at poor prices. Infomra has done well to get this underwritten and reflects the fiath the City has in its management and lng term strategy.

Coould Incisive pull off the same trick. All the rumours are that trading is grim and and getting worse so it could tough for them.

Informa had better hope that their conference business holds up well in the coming months, otherwise they could find themselves in the same position all over again at the end of the year.

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12 Comments:

At 5:24 pm, Anonymous Anonymous said...

I think Incisive are a Private Company, rather than on the stock exchange, so a similar move would be difficult. From what i have seen is more a case of their lenders taking a shareholding in exchange for writing off part of the debt. Of course the question is why would debt holders do this, rather than put the firm into bankruptsy and take over all the equity. A bank-owned Incisive would certainly be a different animal to the Incisive we knew a year ago.

 
At 11:49 pm, Anonymous Anonymous said...

Don't rely on events. They are going downhill. Fast.

Sponsored conferences suffered badly last year and are continuing to struggle. Paid delegate conferences are now going off a cliff.

I don't work for Informa Events or IIR but have heard they are struggling. As is the company I work for!

 
At 7:32 am, Blogger Businessmediablogger said...

Yes, that's right, Incisive is a private company, owned by APAX and debt provided through RBS. RBS may well take a shareholding (a debt for equity swap)or more equity will have to be found from APAX or a new shareholder (hence my comment). Media companies cannot survive a down cycle if they have a pile of debt. There are numerous examples. Let#s try and learn the lesson and in the next boom, if it comes, not build with debt.

 
At 9:21 am, Anonymous Anonymous said...

The double whammy for Incisive is that they now worth a fraction of the valuation when Apax bought them and the desperate measures they have taken to reduce costs mean that their products are now seen as the poor relatives in their chosen markets. Difficult to see how they are going to come back from this.

 
At 6:06 pm, Anonymous Anonymous said...

As you say, difficult to see how they can come back from this (Incisive that is). Certainly good for their competitors if they don't!!
On another note, Newsquest Specialist Media seem to be doing strange things - 2 new launches. One is a b2b pensions monthly magazine, and the other a consumer boxing magazine. Given their level of debts, i am suprised they are launching products which are unlikely to make money for at least a year or two.

 
At 10:00 am, Anonymous Anonymous said...

Tim Weller: 'Controlled circulation model is finished'

6 May 2009
By Dominic Ponsford at the World Magazine Congress in London

Glad I'm not trying to sell ads in to one of his mags today.

 
At 2:29 pm, Anonymous Anonymous said...

I was there and I think the qoute below better sums up what Tim said
“I would suggest in the years to come we would be charging in some way, shape or form for all of our content,” Weller said. “I don't think the controlled circulation model in its current form is sustainable.” who disagrees with that?

 
At 2:40 pm, Anonymous Anonymous said...

It is certainly difficult times for b2b at the moment. Centaur profits down from £19m to £5m - when's the next profit warning coming? More worryingly Centaur's cash is running out (£0.6m cash mid next year according Numis) Could they be in trouble - cash never lies!!

 
At 4:15 pm, Anonymous Anonymous said...

I'm sure the guys at centaur would rather be £1 in the black than £450,000,000 in the red.

 
At 7:12 pm, Anonymous Anonymous said...

no cash means no profits, no way back from that. i would rather have profits and debt than no profits and no cash. It is probably why centaur is panicking and having slash costs so aggressively and it is having a material impact on the quality of what they do.

 
At 5:28 pm, Anonymous Anonymous said...

As an impartial observer I have to say that the Incisive side of this argument does not stack up. Centaur may well have been hit by reduced profits but clearly Incisive have been hit harder when you take in to account the cost of servicing a huge debt. We have no idea what the Incisive profit is for 2008 but the lack of transparency may speaks volumes.

 
At 11:37 am, Anonymous Anonymous said...

As another impartial observer I am amazed by this dialogue. Both companies have their issues, but they are very different sets of issues. Incisive Media is highly leveraged but that is a situation which I assume can be solved reasonably quickly through sensible discussions with its Banks. Centaur appears to be running out of cash which would appear to be a far more serious problem. As far as I am concerned the facts are the facts.

Incisive Media (according to news stories) “could make about £45m” in earnings, is working through its debt issues with the Banks and has supportive shareholders (Apax). It will be interesting to see what their annual Walker report says later this year (assuming they issue one).

Centaur’s latest house broker report has stated (Numis, Feb 2009):
- Centaur cash will be as low as £0.6m by mid next year
- Centaurs “headcount set to fall by -20% (£9m)” to achieve cost savings of £12m in 2009.
- “The group [Centaur] is culling peripheral products”

B2B is in a difficult space – the increased uncertainty and volatility has impacted all players in the market. I am sure we will all be able to learn lessons from Incisive Media, Centaur, Informa and RBI over the next six months.

 

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