Very few things in my life have given me greater satisfaction than spiking the “farewell” column I had grudgingly prepared for this week’s edition. For me, that column would have marked a bitter and tragic end to the FM. For those readers who missed the press announcement last week, the FM has struck a deal to bring on board a new controlling shareholder, Apex Publishing Enterprises.
What this means is that the FM will press ahead as before — still publishing and printing its magazine and retaining its own digital presence. It’s gratifying to see that there are investors who still believe in the traditional media … and are as optimistic as I am about the viability of the niche that the FM has occupied for almost seven decades.
Apex Publishing Enterprises is associated with Charles Pettit of industrial investment company Apex Partners (where JSE-listed Sabvest Capital is a major shareholder). What has struck me in our initial interaction with the company is the recognition of a valuable media brand, and a determination to restore that brand to its former glory.
It won’t be easy or quick. But fresh perspectives and fresh capital can do wonders. Getting a new lease of life is exactly what the FM’s top-notch staff — who have, in recent years, toiled tirelessly and uncomplainingly under increasingly difficult circumstances — thoroughly deserve.
My own relationship with the FM dates back to the late 1970s/early 1980s. My mother was the bank manager’s secretary in Uitenhage and usually brought the old copies home. My mom did the crosswords, and I (mostly) read the scurrilous back page. There was a gravitas to the FM that even a wayward teenager, who leant more towards Scope and Kid Colt, could easily discern.
When I first joined the FM in 2000 — under a fearless and formidable Peter Bruce — the permanent staff complement stood at close to 60. These days we are literally a handful. Hopefully that will change as our enthusiastic new partner gets to grips with the intricacies of the magazine.
Despite our curtailed resources, the FM has always striven to bring our readers authoritative political, investment and economics copy as well as some entertaining left-field delights in our Fox and Lifestyle sections. That will not change and, if I know our new investors, will steadily get even better.
Twice in my 36-year career have I had the misfortune to watch flourishing media brands ruined by strategies that had one fatal flaw — compromising on custom-made content creation. That won’t happen on my watch, I promise.
Then there was the tale of two company presentations on Tuesday: those of packaging and printing behemoth Caxton & CTP and technology hub iOCO. On the release of the latest results, iOCO issued an advisory around an investor presentation with a digital link. Any investor could pick up that thread and attend the presentation … and be duly enlightened on the group’s status by executives. I did just that. It was suitably engaging.
Caxton, on the other hand, was a little distant. The group advised it was “making investor presentations to selected institutional investors”. Conveniently, the presentation was made available on the Caxton website early on Tuesday. But that still leaves ordinary shareholders and investors out of the inner circle, by not allowing access to executives or being party to the questions the select band of institutional shareholders would have posed.
Yes, I know other listed companies also engage individually with their biggest shareholders. But this does create a situation where certain shareholders are more fully informed and other poor sods are only partially informed. Don’t like it … never will.
More’s the pity, because Caxton is one of the most intriguing and compelling value propositions on the JSE. I have pointed out in previous columns that at the current share price investors are buying a cash-generative business that is run on the leanest and meanest terms. And they are getting it for practically nothing, given that the value is underpinned by nonoperational items including a huge cash pile and the commanding stake in listed packaging group Mpact.
Admittedly, Caxton does not operate in the most enthralling of business segments. But its management team not only knows how to consistently eke out a profit but also how to allocate capital smartly. This is such a good story to tell … and tell to all shareholders, as well as the broader investment community.
I, for one, would love to understand Caxton’s intentions at Mpact. By my calculations it cost the group just R810m for its strategic stake. Mpact’s share price has lost more than 20% over a year and is now drifting close to a 12-month low of around R22. With Caxton swimming in cash, would this be an opportune time to pitch an offer to buy out the rest of Mpact? The presentation document makes no mention of strategic intentions at Mpact, though I am sure the selected institutional shareholders would have raised this important question.
For the record, the presentation lists Caxton’s “opportunities” as “new markets, beverage, cork tipping for cigarette market, bucket and cup product range, consolidate existing capacity where there are opportunities [and] make capital investments to drive efficiencies.” There you have it … for the unselected few.
