Reach Share Discussion Threads

[pngasef] 15/2/2019 12:25

A continuation of the share buyback, at these levels would be wonderful. But for cancellation not held in treasury.

[philjeans] 15/2/2019 08:38

Huge cash generator as they continue to cut costs and find synergies with Express group and locals.


Div will be up again no doubt.



Very undervalued and unrecognised.

[harry_david] 14/2/2019 09:28

Freddie,
The circulations of their national titles are declining at the same rate they have been. The average is about 12% and that is in line with their competitors, though the Sun is holding up relatively. The Express is actually doing somewhat better than many expected, it has broadened its news coverage since the acquisition and presumably this has helped rather than hindered.

[freddie ferret] 13/2/2019 17:38

I actually think this has a bit of a problem.
The Express no longer mentions UKIP and a lot of theor readers were UKIP sympathetic.
Also our local rag has gone up in price massively and down in quality content, it is a RCH publication.

[gfrae] 13/2/2019 16:37

There is someone lurking in the undergrowth selling 50s. Not much point in buying for a punt while he is around.

[cityconindex] 31/1/2019 23:52

25th of February finals.

Anyone following the story about FB and Google going to put big money into the Newspapers industry, if so would it not be better if they took ie 20/25 percent stakes so they have a say on their investment, could even trigger a bid.
Maybe put Reach in play as another US investor is looking at the competition.

[cjohn] 31/1/2019 11:28

I love the line about the Miror Group management admitting "turning a blind eye" to the practice of phone hacking. That's a way of saying, it was tacitly encouraged and condoned, rather than stopped.


The cases must come to a close eventually. Unfortunately, hacking was widespread, and cases settled and still likely to be brought represent only a fraction of the reality.

[cityconindex] 31/1/2019 08:48

Wondering if the Reach cases are coming to a close.

[philjeans] 29/1/2019 14:21

Looks to have bottomed at last.

Easy doubler from here.

Adding.

[cityconindex] 16/1/2019 04:02

hxxps://www.thedrum.com/news/2019/01/15/gannett-sale-uk-media-consolidation-starting-pistol-says-ex-trinity-mirror-coo

Did anyone see that the Express has done a deal with Gaming Realms in reference to 2 game's or site's?

[gfrae] 14/1/2019 08:29

It would be helpful to know more about the makeup of the pension fund assets, for example Commercial Prpoperty will be doing badly, whilst FAANG's have done well. I should look at the Annual Report, I suppose.....!
Maybe as CJohn suggests, the recent weakness is due to an expected reduction in the value of the pension fund.

[cjohn] 13/1/2019 14:48

Hi Smicker,

There have been several UK companies in the last couple of years that have off-loaded pension schemes to specialist pension providers/insurers.

((I hold shares in 600 Group (SIXH) which is in the process of finalizing such a move.))


They have then been able to re-absorb any funds left over. At the moment, RCH is nowhere near such an opportunity. But it could happen, if the various factors relevant to the finances of pension schemes went in a favourable direction.


Sadly, at the moment, it's as likely that interest rates/inflation and asset values go in the wrong direction. The economic situation after a No-Deal Brexit might be highly unfavourable to the balances of RCH's pension schemes, for example.



All the best


CJohn

[smicker] 11/1/2019 20:23

Sorry CJohn, just seeing this now. The figure is certainly large at the moment.

I had previously considered any extra deficit payments as a disaster for the company in that they would produce no return for shareholders. I think i may have misunderstood this from the following.

"the Group considers that it has an unconditional right to any potential surplus on the ultimate wind-up of each scheme after all benefits to members have been paid. Under IFRIC 14 it is therefore appropriate to recognise any IAS 19 surpluses which may emerge in future, and not to recognise any potential additional liabilities in respect of future funding commitments."

[cityconindex] 11/1/2019 18:54

What's the take on the IC column regarding Reach Plc?

The phone tapping seems to be a massive drag on sentiment. With no closure, in sight.

[cjohn] 08/1/2019 12:21

Ball park figure: £450m +

[cjohn] 08/1/2019 12:20

Hi Smicker,

At the half year, the pension déficit was £297m under IAS 19 calculations.


This sum represents the difference between uninsured pension liabilities of around £2.2 bn and pension assets of around £1.9bn.


((Around £300m of additional pension liablities have already been insured against: this happened around 6 years ago, when the UK pension scheme briefly went into surplus. These liabilities can be ignored.))


Unfortunately, to off-load the pension schemes, RCH would have to pay a premium over the IAS 19 valuation to the specialist pension company to take on the risk of the liabilites.

Imagine scenarios where interest rates, life expectancy, inflation go against the pension company: its RCH liabilities would increase. So to cover this risk, RCH has to pay them a significant premium over the current déficit.


Think about the huge size of RCH's pension assets and liabilities. Relatively small movements in factors affecting pension calcualtions have an outsize effect on the déficit. This represents a serious risk to pension providers. So the premium to be paid over the IAS 19 calulation would be very large indeed.


So at the moment, there's no way the company could or should do this.


Unfortunately, I suspect also that the IAS 19 pension position has worsened since the half-year results, becasue of the fall back in asset values.

[smicker] 08/1/2019 11:34

Not specific to Reach

hxxp://www.actuarialpost.co.uk/news/article/15-ftse-companies-could-offload-their-pension-plans-by-2021-15394.htm

Has anyone a ballpark figure for the cost of offloading the pensions here?

[cityconindex] 28/12/2018 12:52

Cheers to all for a great year ahead.

[philjeans] 28/12/2018 12:39

Trying to push on - New Year will see more interest and volume.

[cityconindex] 27/12/2018 17:28

The buybacks for cancellation needs the likes of Desmond convincing the board it's the best use of spare cash, but for cancellation only not treasury.

How many percent of the company shareholders/ownings are needed so the resolution is put to the vote?

[kazoom] 27/12/2018 16:42

You can tell that a share has reached the truly boring and overlooked stage when the key point of discussion is the state of affairs SIX YEARS AGO!

I've been otherwise engaged recently so haven't dropped into to comment, but hopefully will drop in soon. Nice to see that CJohn is now on board - you're more discerning than I am - so even even you think the value is now compelling that is for sure a trigger to re run my numbers. I re-increased my stake a few months ago, which in hindsight wasn't so smart. But perhaps I was just a little ahead of events.

[cjohn] 27/12/2018 11:42

Hi Gfrae, debt year end 2012 was £130m.


They were able to profitably purchase insurance cover for liabilities, because at points - not year end if your figure's right - the UK pension schemes were in surplus.


Anyway, we fundamentally agree: RCH is currently certainly cheap and buybacks may be the best use of spare cash.

[gfrae] 27/12/2018 10:50

CJohn, in July 1 2012,after a quick check, I see that net debt was £180m, EPS 30p (doubling the half year number), pension deficit £230m, and they were not paying a dividend. They had not then made the transformative and very successful ,in retrospect,purchase of local newspapers.
I agree many thought interest rates would rise,though not I.
I see RCH's strength as a consolidator of the newspaper industry, and newspapers are far from dead yet.
I still think that they should be using the current low interest rates to borrow money to buy in and cancel their own shares, even if it means giving more money to the pension fund. Unless of course they can find other newspaper assets for sale at a cheaper price elsewhere.

[cjohn] 25/12/2018 09:12

Hi gfrae, you're right that debt was higher, though it was coming down towards £100m.


But the pension defcit was, on the face of it, healthier. Indeed, at several points it went into surplus! Trinity were actually able to off-load some of the liabilities by paying a premium and buying insurance policies.


So overall, enterprise value was much lower than today.

By the way, the overwhelming opinión amongst private investors - including myself - was that the pension déficit wasn't a problem, as interest rates were going to rise back to their "normal" level. As you know, in fact, the reverse happened. Interest rates dropped further.


Anyway, I remain a holder here. There's value, but risky value, in my opinión.