Informa Share Discussion Threads

[25cent] 01/5/2009 12:30

Well you would hope so Loryd but the polecats at INF only work on that principle if it fills their own nest at the same time.
Hence the turning down of a 475p offer last September, well you would not want to be out of the INF gravy train would you now?
Even if it was 100% undoubtedly unequivocally in the shareholders interest to do so.

Not with all the huge bonus payments paid out for reward of outright failure and bringing the company to its knee's in debt.

Even though they were already 100% aware at that time of the freeze in the credit market and the realization that they would breach the banking covenants if they turned down the bid.
Nice work if you can get it, what?

[loryd] 01/5/2009 12:15

It is management's responsibilty to do the best for shareholders (over the long-term) so in that sense the tax move is a plus. However, I agreee that they have badly mismanaged the company. What is frustrating is their failure to acknowledge it and, even worse, a suggestion that they haven't actually learnt from it all, that somehow they think they just need to get over the next few months and all will be okay and cheap credit and ever-growing revenues will resume. We all screw up, but these guys never had a plan B and they still don't have one.

[inki] 01/5/2009 11:41

25cent - your latter comments are very valid.

[25cent] 01/5/2009 11:38

Very probably...
Meanwhile the likes of me will be paying 50% as these polecats dodge and wriggle their responsibilities.
If they had not got the company into so much debt and mess in the first place maybe they would not be looking to avoid paying UK tax as an escape route from their own doing?.

Not a very honorable company is it now?

[inki] 01/5/2009 11:33

25cent
These companies are earning money throughout the world.
As regards choosing where to pay tax, as part of an 'international' structure is logical, and simple arrangement of legal entitlement to minimise some tax. In so far as any profits earned in a 'UK Branch' of an international network this will be taxed as UK profits. A historical tax case suggested it was a taxpayer's right to organise their affairs accordingly. The taxpayers cahrter also states 'It (HMRC) also has no powers to impose penalties on taxpayers for arranging their affairs in ways that minimise their tax liabilities as long as they do not break any rules.'

[loryd] 01/5/2009 10:43

So what do people think would be the tax benefit in £s? Minus the business class flights to Geneva of course.

[25cent] 01/5/2009 10:20

Hi Doc,
(the rights issue) Its not Necessarily a bad thing i suppose but believe me Doc like i have been saying for over 6 months that's the only way that they can meet the headroom check for the debt.

Market reacted positively as it now removes this years worries about the breaching of the bank covenants.
I wont re-vist old ground Kenmill enough said heh!

[the_doctor] 01/5/2009 10:05

I guess that as per inki and others

- reduced tax = greater E
- reduced debt = lower D

= a less risky D/E profile and less risk of covenants being breached

[25cent] 01/5/2009 10:03

Care to commet ken?

[inki] 01/5/2009 09:57

While the rights issue is a statement of requirement for additional liquidity already commented upon by many, the positive is the change is tax status by going oversea. Despite any political viewpoint which is not really relevant to shareholder bulletin boards, the resutl should be a retention of greater NET profit. Hence the slight price improvement.

[loryd] 01/5/2009 09:14

Well 25cent you were close.

I don't really understand rights issues, but the thing that strikes me is that £242m isn't that much and just enables them to limp past their covenant tests. No doubt some spreadsheet monkey can explain why the shares are worth more now than they were yesterday, but the reality is they still have a shed load of debt and the trading statement seemed a mealy-mouthed way of saying things aren't that great. In fact, as you said, the whole statement is a classic denial of responsibility. You have to come away from it all not likng them and not trusting them. Still, on the plus side, at least some of the business is holding up and the traders like it. Perhaps they could explain why?

[25cent] 30/4/2009 12:30

I would suspect that perversely the more the share recovers the more likely the board will see a rights issue as a escape route.
A would say £2 but that's aimho.

[loryd] 30/4/2009 11:23

Yes, you are right re management, and no doubt know a lot more than me about the company. The investment bankers may have made a fortune with dubious advice, but it is management's fault for taking it. Mind you it will be the investment bankers who make the rights issue call to the fund manager ("hello, how's it going, Jimmy doing well at Eton is he? Anyway I understand you are heavily in cash just now, so I have a really good way of putting it to work"). You suspect that saying no and cutting their losses is too frightening for most of them, though it might make more sense in some cases.

Informa probably is a sound business in that there will always be a market for its products, but you could argue that sound has to mean financially viable and it isn't. Give me £1bn and I could set up or buy a profitable business but I would never pay back the debt.

So what price the rights issue?

[25cent] 30/4/2009 10:29

Basically its a sound business but typical of greedy growth plans by poor management over the last 5 years they have over leveraged the company to shocking proportions in their quest for greatness.

Now the hens are home to roost in the debt market they will find it very difficult to not only meet the future headline check for the loans but also to refinance the huge tranche of debts that will need renegotiating
Poor sheep like management that now blame world events rather than their own actions for the mess INF is now in with regards its debt!

No doubt it will be the shareholders picking up this mess/saving the poor managments skins via a rights issue.

[loryd] 30/4/2009 09:31

You wonder how much appetite there is for endless rights issues and what is the motivation of the subscribers. In Informa's case you have to buy in to the long-term model and forgive them foolish overleverage. A cynic might argue that a lot of what Informa produce is guff and if the world ever woke up to the fact then the model itself is in trouble. I suspect they'll get away with it, but I'm not quite sure why the shares are so high. Arguably the advance subscription aspect of the business means that the pain will take longer to show up, but show up it will. Tricky times for the management.

[25cent] 28/4/2009 16:39

How long before the rights issue i wonder?
Not long by the looks of the steep falls over the last few days.

[25cent] 03/4/2009 10:06

If it can break and hold 283p resistance mark then that would be a good sign for the longs, however you get the feeling the market is now firmly overbought and as we know INF seems to want to fall a lot easier than it goes up.

Notwithstanding that possibility it looks a dam site better than it did in November that's for sure chaps.

The chart below shows how INF is right on the money with the FTSE100 index over the last 6 months after recovering from massive underperform in relative strength to the index from October through March

[the_doctor] 01/4/2009 10:00

Haha, that's ok then (assuming your 306 isnt an April Fool!)
Sarcastic dry tone is perhaps right
:o)

[25cent] 01/4/2009 00:26

Hey doc i thought they (your posts) were funny, i was not laughing at you i was laughing with you , i thought that the posts were posted by you in a sarcastic dry tone.
I thought you were funny, it changed my opinion of you.

Your a funny guy, you maybe just dont know it .

[the_doctor] 31/3/2009 21:32

25cent

If you look more closely, you'd realise that those posting my quotes do not post constructively on any stock.
The childish gang of attention seekers spend their lives goading others, or looking for round number posts.
I think that puts it in a rather different context, no?

If I walked through a part and saw a bunch of 16 year old boys drunk on alcopops, vandalising things and upsetting old ladies, I'd perhaps say something. Would it make me popular with those cretins? No.

[kenmill] 09/3/2009 10:24

What projects?
Where do you get the view of constantly needing to replace staff with cheaper ones from? They haven't overstated expectations before so why do you think they are now - is it just because of current economic conditions or something more specific?

[mryesyes] 05/3/2009 21:53

I think this is in big trouble, too many projects/journals, constant need to replace staff with cheaper ones, far too ambitious in its revenue expectations