Johnston Press Share Discussion Threads

[extrader] 06/8/2016 10:34

Hi mrx9000,

I'm interested in the sector (hold TNI, which has its own - pension - issues) but think that there's an issue with JPR that isn't clear.

That's the reported Enterprise Value (EV) = Equity + Debt.

The latest statement shows EV of abt £ 158 Million, £12 M of equity supporting £146 M worth of debt.

That's a lorra, lorra debt !

But this isn't 'debt' as in 'bank debt'. It's the 'mark to market' value of JPR's bonds ! That is, £ 225 M of bonds that the market values at 65p in the pound.

JPR has to repay the FACE amount (£225 M), unless it - or a prospective buyer - is able to buy up all the bonds, at the current 'market value' , without moving the price.

If I were a bond-holder, why should I accept 65p now for something where I should be able to get as near as dammit 100p, either from taking over and selling the company on in 2019 or by refinancing and getting paid out (albeit with some delay) through cashflow ?

With the bonds at 65% and paying nominal 8.625% interest and roughly 3 years to maturity, the running yield is abt 13.25 % and the YTM AIUI abt 40 (?)%.

Unfortunately there's a min £100K face lot, that's still £ 65K - which is out of my league - but why would anyone today buy the equity, when they could buy an , effectively 'convertible option' bond....?

ATB

[mrx9000] 06/8/2016 10:06

May be something, may be not... interviews cancelled and hiring decisions signed off by the ceo of newsquest. Would make sense if there was to be an enlarged group in the future...

"every hiring decision must now be signed off by Newsquest chief executive Henry Faure Walker, resulting in what it described as a “back-door restructuring” of the newsroom."

[dazzaa] 05/8/2016 21:56

Now eddy, steddy, JPR is down but not out, you know that, disappointed yes, angered even at your own failure to appreciate that there could be even more abysmal figures trotted out causing the share price to dive, you can't sleep properly because the mattress is lumpy, well I know, I felt the same raw emotion, anger but am I down hearted now, no.

Its because I'm taking new double strength tablets they block out all but the basic raw emotion....survival and JP has that too in abundance, follow the history I have and you have too for nine years a real roller coaster, this company will survive.
Possibly.

That said I bet there will be some volume next week and I might just be tempted ...that's it I'm off to that special room with a chinese t/a and a bottle of doombar to contemplate on why I'm such an idiot to have bought any JPR in the first place.

[stdyeddy] 05/8/2016 17:26

They did it to annoy me personally. And now my mattress has an uncomfortable gap in it and my portfolio has an annoying red splash next to some poxy paper company. I need more tablets.

[mrx9000] 05/8/2016 17:11

I have to agree with the chap on the lse board about today being a tree shake. Only around £55k in sells. It would seem that they are after stock. Next week will be interesting... why did they lower the price so much for so few sells?

[henchard] 05/8/2016 16:43

Thanks stdyeddy. I'm trying to get a handle on the value of the whole enterprise here, and the equity in particular. I've got the weekend now to do some thorough digging.

[stdyeddy] 05/8/2016 16:36

There's some info here on the bonds and if you click on 'buy' there's a list of brokers. The spread is massive but presumably you can negotiate.

hxxp://en.boerse-frankfurt.de/bonds/johnston_press_bond_plcls-notes_201414-19_regs-Bond-2019-xs1028954441

[henchard] 05/8/2016 16:22

I seem to recall they're barred from paying dividends under the terms of the bonds but does anyone know if they're also barred from doing share buybacks - also where the bonds trade and current price? This is beginning to look an intriguing situation.

[stdyeddy] 05/8/2016 16:11

Just down about 10% today; few buyers evidently. It's kind of awesome really, the way this can sink like a stone and still make £50m a year.

[nick rubens] 05/8/2016 15:07

TNI recovering a bit. Seems a sizeable pension deficit is not as nerve racking as Bond debt, perhaps as they can potentially recover somewhat under their own steam under diferent market conditions.

Good luck here. I dislike seeing long term investors being let down by their investments.

Of course things can change and I hope they do as i'll be looking to buy JPR on any potential good news.

[mrx9000] 05/8/2016 10:14

An acquisition of JP would get the onion treatment...

- Peel away the Accounts department as one is already in place
- Peel away the HR department as one is already in place
- Peel away the IT department as one is already in place
- Peel away the production department as one is already in place
- Peel away the press side that is not needed as already in place in most places
- Peel away some of the editorial departments as they already are in place
- Peel away all of the upper directors, advisors and most management as they are already in place
- Peel away the cost of a stock market listing as not needed
- Peel away the excess rent and owned buildings that are surplus to requirements as not needed
- Peel away the... well you get the idea

and then you are left with an integrated company that will be producing an ebitda figure considerably more than what JP is currently doing which is £50m. This is exactly what Trinity Mirror is doing with the Local World acquisition, which would significantly increase the companies EPS and overall EBITDA figures.

Time will tell.

[mattab] 05/8/2016 10:00

mrx et al

As I stated last night it is what the Institutions do and it seems they are holding firm. Agree with you mrx in regard to your thinking - if there is any time it is now more than any other time in JPR's history.

'Well advanced in negotiations for further divestments.'

Content to sell non-core part of the business - probably Tindle lined up for them unless Newsquest/Gannett step in.

It is a small punt for me tbh but know many are deep underwater - just annoyed but then thought this really is ripe for a takeover.

Someone on LSE stating a pound by October. Point it this is ripe for the picking - however of it doesn't happen short term - I simply doubt it will. Eddy I agree it is now or never. GL

[mali7] 05/8/2016 09:28

1p soon....

Amazing, they should have switched off lights ages ago instead of letting this misery on PIs - sad!

But they all love screwing hopefull PIs....

They gona drag and drag this till very end and let more hopefull PIs keep adding and one day say "unfortunately time to switch off lights", by then big Inst and main management would have escaped already....

All these years behind scene they are all sorting themselves out, and end of day hopefull PIs will get....BIG PRIZE to remember for life

GL all

[dazzaa] 05/8/2016 08:22

So the general consensus is JP is not going bust in fact no where near it.

Okay the purchase of the i was a surprise ... for us but maybe there is a strategy somewhere in that, we just didn't know what it was,is, but reading an article by Peter Preston on the turnaround at LE MONDE is worth a read and JP gets a positive mention.

mrx how I wish your thoughts could turn into reality, all you say is spot on but I fear this company will just plod on but I'm pleased I took your advice and bought some TM.

[mrx9000] 05/8/2016 08:21

This article from a few days ago details Gannett/Tronc...


So turnover of Tronc is $1.6 billion dollars with an ebitda of only $175 million dollars. $175 million dollars is £133 million pounds.

So ebitda of Tronc is £133m and ebitda of JP is £50m.

Gannett has bid for Tronc with $864 million dollars, which is £657m pounds (including debt). Tronc has a lot of debt as well.

Even if we said Troncs Ebitda is 3x times that of JP and we divide £657m by three, we would arrive at a figure of £219m pounds. Still significantly more than at present.

Even if we looked at half that figure of £219m and gave it £110m it would still be more signifcant to present. And even if we halved that £110m to £55m it would still be significantly higher than at present.

That is why I will be very surprised not to see a Newsquest/Gannett approach. It would be instantly be EPS earning and will significantly increase their EBITDA.

[stdyeddy] 05/8/2016 07:41

Daz, Matt: late night messages - hope you're not losing sleep over this. mrsx, yes, a newsquest bid makes sense from what we know, but timing is the issue for me. Now is the right time - newsquest has a dollar based parent so the timing is ideal now (sterling so low), and yet we see no clue. If it doesn't happen soon, it'll probably be never.

[mrx9000] 05/8/2016 06:46

Going on from the recent discussion I will say this...

Trinity Mirror has done very well indeed from its Local World acquisition. It has given them a greater reach, achieved large cost synergies and is making them real cash.

The same can be said for a company such as Newsquest taking over JP, the points above with Trinity Mirror would also apply to Newsquest - achieving cost synergies and pulling in real cash.

Would a company want to wait a few years down the line to potentially pick up JP titles and then face a potential bidding war over them e.g. Trinity and Newsquest or would they buy it outright.

My guess is an outright buy as Newsquest know that Trinity could quite well be blocked in acquiring JP, but Newsquest wouldn't and they would not want to end up in a potential bidding war later.

Cost synergies would be huge in my honest opinion.

They would be adding £20m a year to the pot from not paying interest on debt.
The cost synergies would be massive - they would not need multiple layers of the business as they already have them in place. Cannot give a figure for this but can only guess at least £20m-£50m or more in cost savings.

[mattab] 05/8/2016 04:05

“Nevertheless, we are focused on our strategy of increasing overall audiences, maximising opportunities for the i, maintaining tight cost control and rebalancing our portfolio. In that respect, we are nearing completion of the disposal of our Isle of Man newspaper group for £4.25 million and are well advanced in negotiations for further divestments.

“The divestment plans, alongside the strategic implementation of key initiatives such as Salesforce of the Future, will put Johnston Press on a stronger footing for the future, focusing on key geographies, audiences segments and higher yielding advertisers, and will enable us to continue to reduce debt levels and cut financing costs further and prepare the business for refinancing due by 2019.”


Well advanced in negotiations for further divestments. Expect a series of RNS's then!

[dazzaa] 05/8/2016 01:17

I am naive no number cruncher but tell me someone in day to day running of the company any company where is the shareholder, generally on the sidelines ? waiting for the divi or an increase in price to sell at a profit or not, we are not consulted or needed save for rights issues, complete control given to the Directors, given a seat on the board if you have enough shares, the cumulative (us) don't, my point being if the company is solvent, which it is, makes a profit which it does, why are we so concerned ? imminent collapse I doubt that too, Brexit it's there but not as we know it yet so again panic, if the share price drops lower, will Tindle sell his millions now of JP shares, let me think on that one,

So the fact that the price is 11.5p or 5.5p will only affect our day to day emotions and expectations more than the company in the short term.

Is that too simplistic?

Now how soon can we get rid of the Directors, who voted them there.

I'm taking another tablet.

[mattab] 04/8/2016 22:25

If the shares were owned by 3/4 Institutions totalling 10 percent - the rest in PI's hands I would be concerned. Not impressed but could be the start of some real shareholder value.

Now there is no doubt if one/two Institutions start off loading this will get hammered - it is all if they back it and at least hold - all relative but multi millions crystalising massive losses from the Institutions did we not have a target from one broker of £2:30? It is cheap and vulnerable more than any time IMO. Heading like all organisations towards Brexit and more uncertainty. 25 pence is probably more like it!

The likes of Tindle I am sure will back this - heavily invested and looks like a chump atm - which he is not.

Volume massively increases and evidence of Institutional selling then as shareholders there are serious issues going forward - always volume is the indicator plenty of volume of late with a couple of Institutional investors selling who has accumulated these - massive trades cumulatively and not PI's.

Darkest before dawn? See what transpires over the next few days will give a better picture - the market has all but written JPR off as going down the pan - just a matter of time perhaps.

Too many cumulative stakeholders totally over 60 percent - that should be some comfort.

[dazzaa] 04/8/2016 21:32

Tablets you say eddy, nembutal more like, any way today is not the end but it could be the could be the begining of the end, what more can I think, AH five years beavering away, I can still remember our thoughts, postings, when he arrived, we were full of confidence that he was the savior ex microsoft, ex BBC digital man of the decade (my interpretation) now soon to be ex JPR along with the syncophantic bunch who came in on his ticket, he has done the hard graft, culling and put in place the digital side needed, has been paid handsomely, now it needs a hard nosed go getter that wants the share price to rise not the idiot that sold a measly bunch of shares for what, pay a bill, when he earns £1m + now, if the directors do want to send us a message, now is the time.

As always we think alike, as you say perhaps the next few days will be
pertinent as which path to take, I am by nature a risk taker but to be frank have no wish to lose a not insubstantial amount.

That said, is the writing really on the wall (what will it take for me to walk away and cuddle Lord C with platitudes for his vision, foresight his intelligent postings) but I'm not there yet, tablets are to hand though in case I need to.

Mrx tell me again and again that a takeover is imminent, mantra style and I might believe it, yep the tablet is working, I will sleep tonight.

[mattab] 04/8/2016 20:58

A million shares traded on slightly worst then expected news just one percent guessing punt money and there was some massive volume prior. It really is what the major shareholders do without doubt - that's is what matters. Cannot imagine them not backing this tbh. Volume is always a factor - MM took this down and punt money did what they do and move on. If it was heavy selling - likely Institutions I would be concerned but that is obviously not the case. All have millions (multi) to lose not just a few grand - know it is all relative but not many in the free float. For the market cap - massive Institutional Ownership beleaguered share price yesterday now a disgrace. I think it will move north - there is no doubt that this is cheap - equity valued at very little and perhaps open wide for a predator. It is what is it but is vulnerable and AH's strategy is certainly not working - tough job but massively well paid for abject failure. I believe certainly that Tindle certainly will back this perhaps others - but volume is always the key and it's less than one percent. See what tommorow brings think north and they will back this. Market is tired of AH and spin - if you cannot get shareholder value then someone or organisation will. Too much invested by the Institutions backed time and again - volume is the key and what the real massive stakeholders do. I can't know but time will tell. GL all - me holding - possibly adding. 60 percent owned - it really is what they do not PI's having a punt - long term shareholders PI's wow - I held and crystallised a slight loss at 28 pence only one trading JPR pre RI and consolidation and where are we now!