The chief executive of News Corporation, Rupert Murdoch, came under a sustained interrogation from financial analysts yesterday when he hosted a conference call for the media group's full-year results.
The first curveball came from a Deutsche Bank analyst who wanted to know whether the "affiliate fee revenue growth" for the Fox Network could reaccelerate into double digits.
Then came a probing question that the members of the British parliamentary committee into misconduct at News Corp's British operations now wish they should have asked.
"Was there anything unusual?" a Merrill Lynch analyst asked the chief operating officer, Chase Carey. The unusual thing the analyst wanted to know about related to News Corp's relatively strong advertising revenues.
The same analyst then caught News Corp's executive team off-guard with a question about gross and net leverage.
Just as it seemed the hard questions had eased off, another analyst asked Murdoch about the buyback of News Corp stock.
Then came another question about the cash on News Corp's balance sheet. Then another: "Could you talk about the pacing right now of the local O&O [owned and operated] business from what you could see on the small-picture side?" There was then a barrage of questions about the Fox business, the possibility of rationalising the newspaper printing operations, returns on capital and higher cable network costs.
Then, finally, 48 minutes into the call, a Morgan Stanley analyst wanted to know about the one-time costs associated with the "News of the World litigation stuff".
CUT TO CHASE
Fortunately, Murdoch managed to elaborate on the News of the World stuff without the need for any questioning from analysts. "I'm personally determined to put things right when it comes to the News of the World," he said. "There can be no doubt about our commitment to ethics and integrity."
As for speculation about the decision on whether his son James would take over his role, the Sun King said: "I hope that the job won't be open in the near future."
But just in case News Corp needed a new boss fast, Murdoch said the top job would go to his right-hand man Carey. "If anything happened to me, I'm sure he'll get it immediately if I went under a bus."
VALE VALAD
The last rites for the Crap Cap of the property sector, Valad Property Group (aka Invalid), will be given today when a court order will be lodged with ASIC approving a $207 million takeover by Blackstone. Invalid (aka Impotent), which has seen it shares fall 96 per cent from their peak and has produced an impressive $1.7 billion of losses over three years, will cease trading at the end of today.
It seems a long time since Trevor Gerber made his first comments as chairman in the 2008 annual report, when Invalid (aka Vlad the Impaled) shares were worth five times more their present value.
"As Valad's chairman since September 2008, I am fortunate to have the insight and assistance of my other board members who are as determined as I am to help build security holder value," he said.
CASHING OUT
MyATM, an automated teller company which in April farewelled the ex-federal Liberal politician Ross Cameron from its board, cemented its reputation as one of the dud listings of the year by offloading some of its loss-making operations on Tuesday.
MyATM, whose shares have tanked 91 per cent since their January listing, announced it had sold 124 of its Aussie ATM sites to another listed teller company, Customers Limited.
A MyATM announcement on Tuesday said the sold sites did "not necessarily meet the company's 'convenience' model".
MyATM has seen its shares fall from 20? to 1.9? since listing. Cameron, a former parliamentary secretary and Macquarie operative, quit as a director to "devote more time to his other business and personal commitments". MyATM still has the former Liberal pollie Grant Chapman on its board.
Before its listing, MyATM was forced by ASIC to lodge a second prospectus, where it wrote down the value of its largely intangible assets from $22.8 million to $8.5 million.
MyATM's share price performance is even worse than RedHill Education, which has seen its shares plummet 87 per cent since its September 2010 listing.
Got a tip? Use our online tips box or email srochfort@smh.com.au Twitter: @srochfort
Frequently Asked Questions about this Article…
What were the main investor questions during News Corporation's full-year results call?
Analysts pressed News Corporation on a range of investor-focused topics: whether Fox Network affiliate fee revenue could reaccelerate, the strength and sustainability of advertising revenues, questions about gross versus net leverage, the company's stock buyback plans, cash on the balance sheet, the pacing of local owned-and-operated (O&O) businesses, potential rationalisation of newspaper printing operations, returns on capital and rising cable network costs, and one‑time costs tied to the News of the World litigation.
Could Fox Network's affiliate fee revenue growth reaccelerate into double digits?
The article reports analysts specifically asked whether affiliate fee revenue growth at the Fox Network could reaccelerate into double digits. While the call raised the question, the piece does not give a definitive answer — everyday investors should watch Fox affiliate fee trends in upcoming results and guidance for signs of reacceleration.
What did Rupert Murdoch say about the News of the World litigation and News Corp's ethics?
Rupert Murdoch addressed the matter directly on the call, saying he was personally determined to 'put things right' regarding the News of the World litigation and emphasised the company's commitment to ethics and integrity, according to the article.
Did the call provide any clarity on News Corporation's succession plans?
Murdoch acknowledged speculation about his son James taking over but said he hoped the top job would not be open in the near future. He also indicated that his chief operating officer Chase Carey would be the immediate successor 'if anything happened' to him, per comments reported in the article.
What happened to Valad Property Group and what does the Blackstone takeover mean for investors?
The article says a court order was being lodged with ASIC to approve a A$207 million takeover of Valad Property Group by Blackstone. Valad had seen a dramatic share decline (about 96% from its peak) and large cumulative losses; the company was set to cease trading, meaning shareholders should expect the takeover to complete and trading to stop as described.
Why have MyATM shares performed poorly and what actions did the company take?
According to the article, MyATM's shares plunged about 91% since its listing. The company sold 124 Australian ATM sites to another listed teller company, Customers Limited, wrote down the value of largely intangible assets in a second prospectus (from A$22.8 million to A$8.5 million), and saw a board change with former politician Ross Cameron leaving the board.
How did Customers Limited fit into the MyATM situation?
Customers Limited bought 124 of MyATM's Australian ATM sites, which MyATM said 'did not necessarily meet the company's convenience model.' The sale was part of MyATM's strategy to offload loss-making operations, as reported in the article.
How have other recent small-cap listings fared compared with MyATM?
The article notes MyATM's share decline was even worse than some peers — for example, RedHill Education saw its shares fall about 87% since its September 2010 listing. This context highlights the volatility and risk that can accompany small-cap and recent IPO listings.
Call 1300 880 160
Start a chat
Schedule a call
