Rumours uncomfirmed that Penny Wilson Editor in Chief of RBI's Travel Weekly has gone. Also unconfirmed that UBM's TTG is to go online only.
I guess we just have to wait for the news about how any such change reflects the continued success of the magazine rather than an admission that this would be further evidence of the urgent need for a new magazine model.
The Sunday Telegraphreports that Ingenious Media has written off its stake in Incisive Media. They were part of the investment fund put together by Apax to do the deal to buy Incisive when it went private. With so many of the large business media companies being in private hands we can't see how bad trading really is. Management at Incisive Media claim the business is still very profitable, but we have to conclude, that Ingenious at least has concluded that the outlook is not great and the mountain of debt is too steep to climb.
We would agree with that view. Incisive will have to do three things. A refinancing/ debt equity swap/injection of funds from Apax is now almost inevitable. Second, like other business media companies, a move to a new low overhead model is now urgent. Waiting for a recovery just will not do. Third, Incisive should consider the sale of some assets - even if not ideal, to focus on a smaller number of core competencies and to pay down some of its debt.
DMGT is seeing a pretty horrid melt down in regional newspaper revenues but claims the B2B division is holding up well. In part this is another company with a big trade show exposure (Like United Business Media) which is holding up better than companies with a bigger print exposure. But even B2B, if we decode the update from management, is having a tough time.
The announcement claims that B2B revenue is up 15% in the first five months of the year is caveated by a note that this is mianly due to exchange rate movements. In the five months at issue the dollar sterling exchange rate has moved 24%. My guess is that in real terms, b2b revenues are down.
Whilst B2B is holding up better than regional newspapers for now, let's just hope that what is happening in local papers is not a vision of the b2b future to come.
News from The USA that forecasts a 17% decline in trade show participation this year. UBM recently reported a 5% improvement in rebooks, which tells us that this has not affected them yet. You have to fear that it will. Rather like recruitment, revenue drops in trade shows trend to appear as the same number in the profit fall. There are fewer staff to cut and tennancy costs are already locked in for the year. Time to hold your breath and hope this forecast is wrong.
One of the big challenges for b2b companies is how to move their digital content strategy forwards. In a world where magazine editors need help in understanding all the things that can be done and in a worlds where sticky content is much more than just news and features published online, you might have thought having a digital content director would be a good idea. Um. Well not at Emap apparently, where the position is being rested.
Incisive Media, on of the debt laden b2b houses has told staff to take a weeks unpaid leave at Christmas. According to Press Gazette this will save £1m this year, implying that the total payroll costs are £52m. This initiative is to minimise redundancies according to UK CEO James Hanbury. The maths says the opportunity cost is 30 jobs. Like so many of these initiatives, whilst necessary, this approach does not address the fundamental change in the economic model that will be required for long term success.
On a technicality, Incisive are reducing pay each month as the mechanism to pay for this, so as to avoid a very small payment to staff at Christmas which is when the leave has to be taken. Deductions from pay require the permission of the staff. I doubt that many staff would say no under pressure to save their colleagues jobs but what if someone refused to give the company permission to make a payroll deduction? Does anybody know what the legal position of the Company and employee would be?
Just a few months ago, Euromoney was bragging about how well it was doing. Now it is asking staff to take unpaid leave. Either the trading in the company has seen a horrible drop or this is opportunism by the management to save some money using the excuse of the downturn. My experience is that in a downturn everyone has to work harder; asking people to work less seems perverse.
The share price is down 55% on a year ago. Profit last time out was around £43m. Market cap is around £180m which some might think a low multiple for a business which has substantial subscriptions income.
The drive to save costs at Euromoney could be as much to do with the needs of major shareholder DMGT as it does with Euromoney itself.
It seems as though even paid information company employees cannot consider themselves immune from the current malaise.
It has been a busy week for the public companies. Centaur Media saw its' share price fall to a new low of 17p and the directors actively buying shares presumably to make it tougher for unwelcome predators to scoop up the company. UBM produced results which prove that having just 10% of the business in print is good thing which could only be bettered by having less than 10% of the business in print. Most interestingly United Business Media claimed that rebooks on next years shows are up 5%. That is not only surprising, but also encouraging. Of course a rebook is not necessarily the same thing as contract to attend, but with so little good news around this certainly put a smile on my face.
Since we last spoke Reed Elsevier posted its results too and with most of its business in online subscriptions they were good. Also announced was a £120m reorganisation of RBI. This has to mean job cuts, but as far as I am aware no news yet of a 90 day consultation in the UK (a legal requirement if 100 job cuts are proposed).
Centaur confirms Profit Drop as RBI Doesn't strike
Common sense has broken out at RBI as journalists vote against strike action. Meanwhile Centaur has published its interim results showing revenue down 19% in the six months to December. Like others, Centaur is struggling to offer any guidance on future earnings and the uncertainty has punished the share price - now down to 19.5p valuing the company at less than £35m. Cash has been consumed in share buy backs leaving only just over £1m in cash on the balance sheet.
Management has confirmed that the dividend will still get paid however.