Reach Share Discussion Threads

[trident5] 26/7/2018 13:30

It was up 100% earlier today.

[gfrae] 24/7/2018 16:05

JPR appears to be in it's last throes,according to article in today's Times.

[cityconindex] 24/7/2018 14:52

Is there another article this morning in th IC?

[jimbox1] 23/7/2018 07:50

Contrarians Only - re IC "Sell" stance

You can't get a clearer "BUY" signal than that.

[cityconindex] 20/7/2018 16:27

Seems like the IC have written off Reach. 🤐

[cityconindex] 19/7/2018 08:29

Guys how big is the Irish stake in the 50/50 investment? That's hijacking the SP?
And are there other magazines and papers run by reach over there that's bothering the Irish so much?

Would a negative decision affect the rest of the takeover?

[gfrae] 12/7/2018 08:42

I agree with you Harry,though in the short term there may be or are worries about how RCH will pay for them.

[harry_david] 11/7/2018 10:13

gfrae,
have just seen your last post, this will be an ideal purchase for Reach at the right price. They know all there is to know about regionals and nobody else will want to take them on.

[twixy] 11/7/2018 10:04

Setting aside the crippling bond interest, JPR operate on attractive gross margins so I wouldn't be dismissive of RCH acquiring an interest in the venture; perhaps as a JV with bond holders when it falls into their hands. It's in the bond holders interest to keep it afloat and being as efficient as possible in doing so.

[cityconindex] 11/7/2018 09:56

I sincerely hope the only part of jp they buy for a nominal sum is I paper. And let the rest sink. There are successful companies in the media sector which are making money. Why chase after dog's with fleas.

[harry_david] 11/7/2018 08:30

pvee, like you I am a believer and apart from Donald Trump cannot see a reason to be negative. The new papers are performing well and advertising is reported to be doing better.

[gfrae] 11/7/2018 08:28

Harry, I only mentioned the market cap of JPR as it makes it appear that the company is on the point of collapse,or some sort of debt for equity swap. I imagine there is zero possibility of RCH taking over the company ,with it's debt and pension fund deficit as you allude.
However,managing declining newspaper businesses is RCH's business,and so far as I am aware they are the only people doing it therefore there must be a high probability that RCH will get involved in some way or another.

[pvee] 10/7/2018 21:29

Dear all

Have you noticed the Irish govt investigation into the buyout of N&S etc + the announcement of a 2% sell-off by one of the main shareholders ?

My biggest holding so a genuine question not an attempt to deramp

I suppose we have to wait until the end of the month to know for sure where we're heading

I have to admit my finger is on the buy button - a minute before the market closed it was down 4.5p and then by magic it returned to zero at the close...surely below 70p it's a buy despite the negatve "press"

Something strange going on

[harry_david] 10/7/2018 19:02

Gfrae, in my view the market cap of Johnston is irrelevant, though it does show clearly that the company has no future as an independent company.
The problem is that the existing debt and the pension deficit are higher than the worth of the underlying business, and by some margin. Bond holders will have to accept a haircut of upwards of 50% and no doubt this will take some time to sink in before they will do any deal.
Most of Johnston's regional papers are small, Reach already prints several of their titles so a deal is going to be hard to strike. As the only potential buyer my guess is that they will ultimately go to Reach but there may be a long wait.

[gfrae] 10/7/2018 12:16

Now that the market cap of Johnston press is under £3m and sinking under it's expensive debt, does anyone have any ideas what happens next ? Presumably as the self styled consolidator of the sector Reach will be involved.

[harry_david] 05/7/2018 18:39

CJohn, The bank and negotiating fees payable in the first half were £4.8 million, see my earlier note.
One explanation for the improving cash flow would be that the takeover took effect at the end of February and from memory the newsstand prices of the Express and Star were increased in late March or April. The Star in particular went up by 33% to 40p and the Express I think went up by 10p also. On combined circulations of 600,000 that adds over £300,000 a week net.

[cjohn] 05/7/2018 17:34

Hi 3800, I'd like a large margin-of-safety given the numerous imponderables and risks the company faces. Assuming no change in circumstances, i'd certainly begin buying in the low 50s. As at that price, there'd be at least 50% upside to my pessimistic intrinsic value calculation.


I wouldn't be following the share, if I didn't think it was close to being investable (for myself.)

[cjohn] 05/7/2018 17:22

But thinking about it, we've both missed the transaction costs for the acquisition, which were £7m from memory. Some of those costs will have been incurred last financial year. In any case, you can add a few million to the £23.4m free cash flow figure I came up with for the first six months.

[cjohn] 05/7/2018 17:18

Hi Harry, the unpaid consideration isn't included in the debt figure.

Net debt is loans (short-term and long-term) minus cash and cash-like securities.

[3800] 05/7/2018 15:53

Thank you for the contributers to this thread for giving such informed and considered analysis, most of which has gone over my head. May I just ask Cjohn at what price would you buy Reach? Or is it a question of you wouldn't buy at all with the existing fundimentals?
3800

[harry_david] 05/7/2018 14:51

CJohn, you may be right with your analysis but to this non accountant net debt includes unpaid consideration for the acquisition but perhaps not on the pension top up as this is not irrevocable if there is an interest rate rise.
My experience in media is that the first two calendar months are the best for cash flow as you collect the debts from November and December the top months for advertising.
The terms of the takeover were cash neutral so I assumed nil cash as per contract.
The announcement itself was positive on cash and as you know they are not given to overstating their achievements.

[cityconindex] 05/7/2018 12:26

CJohn many a punter would love to have your ability to wait. A good lesson.

[cityconindex] 05/7/2018 12:25

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