Thursday, September 24, 2009

Weller - Never said what was reported

In spirit of fairness, Tim Weller claims,
"Totally stiched up by STimes, I should know bettern I never said "I am pleased to be shot of Private Equity" I said very happy with new deal" on a Tweet yesterday.

Those who eat with the devil should use long spoons

Wednesday, September 23, 2009

Uriah Heep is New Incisive CEO

In an extraordinary interview given to The Times, Incisive Media CEO Tim Weller claims he has found his recent debt for equity deal crisis a humbling experience. Humble! In the interview the copy brags about his Aston Martin, his ski chalet and his £11m in the bank.

His erstwhile owners (who still have stake in his business), Apax, are derided by Weller for bringing no operational understanding to his business. We are glad to be shot of private equity, he says.

He claims that the level of debt was never discussed at board meetings! Isn't the Chief Executive responsible for everything? Why didn't Weller put the debt issue on the agenda. If I were running a debt laden business, I doubt I would discuss much else.

Anyway, it's nothing to do with him. Not my fault guv. I paraphrase here, but he says, "Apax showed me one slide that debt was a good thing. It seemed ok to me so I thought no more about it."

Oh come on. Weller was desperate to get off the public market. He personally made a fortune as the business went private. Now the banks have lost their shirt, Apax have lost almost everything (in the Uk business at least), and the ceo says, depsite the fact that he blames PE for all his businesses woes, he'd do a private equity deal again because he got what he wanted out of it. You can almost hear the rush of private equity feet queing up to get some of that action.

I should think there are some lids blowing off the heads of APAX execs.

Meanwhile in another interview with Paid Content, Weller says all is well with the business and he doesn't need to make any more cost cuts oe sell off any assets. Yeah right. I wonder if the banks agree with that. They won't be interested in growth and aggressive expansion. They just want some of their money back.

There are moments when bumptiousness and larger than life straight talking can serve you well, but when you have laid off hundreds of staff, supervised the loss of your shareholders money, and the lenders have taken a big haircut, it's probably a good idea to go to work in the Mondeo rather than bragging about the Aston and the Ski chalet and to exude a bit of genuine humility.

And finally, one article reports that Helen Alexander is to be Chairman. That would be odd. The banks will want the chairman to be on their side, to hold the CEO to account. Helen A did a fantastic job at The Economist, but she is an old mate and admirer of TW's isn't she?

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Friday, September 18, 2009

PPA Shepherd Slaughtered

After just eighteen months in the job, John Shepherd, the PPA CEO has left with immediate effect. He was not a universally popular appointment amongst the great and good of the PPA members from the start, but there were few applicants of merit so the view was he was the best that could be secured.

I don't know what finally did him in but there were rumblings that Shepherd had appointed rather too many former colleagues and some members were unhappy about the closure of the PPA marketing department.

The PPA is a rather quaint thing in the modern media age. When business publishers are as likely to be orgainsing a conference, building a web application or assembling data as they are to be wiriting magazines, the notion of a trade body whose purpose is to promote periodicals seems rather anachronistic. What is needed is a completely fresh approach. Business publishers are as interested in negotiating with google as with the royal mail. Change the PPA name, start admitting members who don't publish magazines. Create an entirely new mission statement that reflects the modern world. Failure to do this will leave the PPA looking increasingly irrelevant to its dwindling membership base.

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Centaur Revenues Collapse

Centaur Media's annual results show that revenues dropped by around a third last year. Their preferred profit measure shows a £7m Ebitda, but this drops to £1.7m once amortisation and exceptionals are added back and just 0.9m after tax.

Centaur hopes that revenue will recover but during the downturn, even online revenues have dropped. Staff have been culled but revenue/head is still below £100k which even in the good times is too low to get rich on.

Dividends have been cut refelcting the uncertainty about the rate of the recovery.

Cash is tight - just 0.6m left. Happily, Centuar has a bank facliity and a clean debt free balance sheet but with revenues of just £60m, and not much reecovery expected soon, no really radical thinking and tight cash, expect a drip drip of cost cuts through the year.

Wednesday, September 9, 2009

RBI's Jones says, "Dont Panic!"

The Summer holidays are well and truly over. Last week Emap started a senior management cull. Incisive Media got broken in two and now RBI declares a further round of urgent cost savings.

Global CEO Keith Jones, may have been lying on a sunbed somewhere hot and sandy, dozing after a good lunch when he suddenly sat up with a jolt of realisation that his business has more costs than it can live with.

Most people have thought that RBI has rather too much management rather than too little. Too many layers slow up decisionmaking and discourage risk taking. We might exepct some meaningful attempt to correct this. Jones says in his note to staff that, in terms, he has run out of patience with duplicate costs. I guess, in code that means, if you are a manager who eports to someone who reports to someoone who reports to someone who makes a decision, some of the people in the middle are going to be in the queue for a pink slip.

Jones also says that profits must grow by at least the rate of inflation. That means, whatever the rate of inflation, in real terms no growth at all. He also has an ambition to get 50% of his revenues from online. He can achieve this in two ways. WAit for the magazines to die off, or make some brave and radical decisions. His demeanour says he is ready to do this. He has had nine months to think about the plan. He might not have declared it all yet - but a plan he will surely have.

For RBI employees, who have strong union reps and don't much like change, this will be scary. The right choice for them all is to embrace change and not to shun it.

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Monday, September 7, 2009

Less Strings to the Middleboe

Many people think that business media companies have too many senior managers. Even those who tackle costs in their own area are vulnerable to being chopped themselves. Simon Middleboe, the CEO of Emap Inform, the print bit of Emap, has been culled from his job after 25 years service.

Saturday, September 5, 2009

Incisive Split in Two as Banks Take Control

After very lengthy negotiations with the banks who funded the growth and MBO of Incisive Media it looks as though a conclusion is close.

Ambitions to be a mega business media company, long part of CEO Tim Wellers desire, are over. The business is being split in two. The US business, which includes American Laywer will have seperate management and different ownership from the UK based business, which Weller will continue to run. The debt structure was different in the US and different terms have been agreed.

The US piece will be owned 49% by the banks. IN the UK the debt mountain of around £400m is likely to be halved and in which case private equity owner Apax are all but wiped out. That part of the deal is, we understand, not yet concluded.

In his note to staff last week Weller claims that his business is still operationally profitable.

His only job now, and the only metric the banks will be interested in, is how fast he can repay the remaining debt. This is no small task. The UK business has some very troubled assets. The dependence on legacy print is far too high. The overhead is too large for a sustainable future. Wellers note says that he "cannot wait to get back into the business" and that his business has "leading brands and "a proven strategy". What he doesn't say, is that that his strategy was proven in a world that no longer exists. He needs a new strategy if he is to stand a chance of meeting his banks expectations.

Weller and his team will not be short of things to tackle and his new owners will rightly be harder and more impatient task masters than any his business has had before.

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