Fairfax - no boss zone

[oracle]

For the 12 months to June 30, Fairfax posted a net loss of $2.723 billion, 599.1 per cent wider than last year's result.

Fairfax Media Ltd says early revenues in fiscal 2013 are tracking 10 per cent below last year, after significantly widening its annual net loss.

Mr Hywood volunteered to give up half the $840,000 bonus previously approved by the Fairfax board.

Full article here

I find that interesting. Loss after loss...but still the chief executive doesn't want to give up his entire bonus.

On the other hand, BHP boss doesn't want to be even considered for bonus even though BHP made a solid profit outperforming all it's peers.

I remember Woolworths executives taking a pay cut some time back even though it made good profits just not high enough to their liking.

A lot of people say how do you evaluate management? It's behaviour like this that should be noted when determining whether management is working for shareholders or themselves.

Cheers,
Oracle.

 

[Aaron_C]

A lot of people say how do you evaluate management? It's behaviour like this that should be noted when determining whether management is working for shareholders or themselves.

Oh indeed it does...but this is always a problem with big companies where management are not related to the founders or major shareholders. Look at how much major law firms charge their BHP/RIO etc clients - they don't care cause the person approving it at BHP/RIO doesn't give a **** either as it's not his money.

 

[Sunfish]

BHP's failed bid for the Canadian phosphate company cost 250 mill. That would have been paid to suits. Nice work if you can get it.

 

[oracle]

BHP's failed bid for the Canadian phosphate company cost 250 mill. That would have been paid to suits. Nice work if you can get it.

When you are flowing in rivers of cash, which BHP was at that time, you can afford to lose some without causing too much damage to your bottom line. Buying Potash corp would have been good for BHP long term in terms of diversification, so it was worth it.

On the other hand Fairfax is flowing in rivers of red ink. There are losses right, left and centre. If it doesn't get it's act together soon Fairfax will be history.

The beauty of capitalism is it always works, sometimes it just takes longer. As a business you have to perform or else competition will make sure you perish. And yes this applies to BHP as well. Seems like they know this very well hence, the shelving of Olympic dam project.

Cheers,
Oracle.

 

[Sunfish]

That's true Oracle but BHP's shareholders wouldn't have minded sharing that money. My comment was adding to the one that they pay lawyers outrageous rates.

 

[Tuppence]

When you are flowing in rivers of cash, which BHP was at that time, you can afford to lose some without causing too much damage to your bottom line. Buying Potash corp would have been good for BHP long term in terms of diversification, so it was worth it.

On the other hand Fairfax is flowing in rivers of red ink. There are losses right, left and centre. If it doesn't get it's act together soon Fairfax will be history.

The beauty of capitalism is it always works, sometimes it just takes longer. As a business you have to perform or else competition will make sure you perish. And yes this applies to BHP as well. Seems like they know this very well hence, the shelving of Olympic dam project.

Cheers,
Oracle.

Much of what you say is probably true. But, it's worth being aware that much of today's announced losses was in a writedown of the major mastheads (I.e, a paper loss - irony intended ).
FWIW, the papers made a profit last year. A smaller profit than the previous year, it is true, but they still make $. I don't think it's fair to say there are losses left, right and centre - that's rather simplistic, IMHO.

 

[Dazz]

Fairfax is flowing in rivers of red ink. There are losses right, left and centre. If it doesn't get it's act together soon Fairfax will be history.

.....and the only people left to buy the left wing rags will be right wing business people.....ouch !!!

 

[oracle]

Much of what you say is probably true. But, it's worth being aware that much of today's announced losses was in a writedown of the major mastheads (I.e, a paper loss - irony intended ).
FWIW, the papers made a profit last year. A smaller profit than the previous year, it is true, but they still make $. I don't think it's fair to say there are losses left, right and centre - that's rather simplistic, IMHO.

You can call my assessment about losses simplistic. But here is a snapshot from todays annual report


Total contributed equity = $4,646,248
(This is how much money the shareholders have put into the company so far)

Shareholder equity = $2,042,677
( This is all that's left of it)

Of that equity consists of

Intangible assets worth = $2,502,045 (after writing down $2.8 billion today). So before today directors thought their intangible assets were worth $5.3 billion!.

So if those intangible assets were not there the company's equity would be negative when you factor in the total liabilities. Which means the shareholder contributed equity of $4.6B is long gone, except in the form of intangibles

If you add back the written off amount the total equity would be $4.8 billion. However, you can buy the entire company for 1.3 billion based on it's market cap. As of yesterday you could buy $4.8 billion worth of goods for $1.3 billion.

How often do you come across such a scenario and conclude after all the company still made a profit of $500 million before Depreciation, Amortization and Income Tax. All of which by the way matters as an investor you should know that. By the way the company sold of it's 34% stake in TradeMe for $422 million. Had it not done that I think things would have been even worse.



Cheers,
Oracle.

 

[oracle]

.....and the only people left to buy the left wing rags will be right wing business people.....ouch !!!

Share price down over 11% today to $0.45. At 2.352 billion shares..that values the company at just over $1 billion.

Shares in Fairfax Media have plummeted amid news that major shareholder Gina Rinehart has failed to sell a block of shares in the group due to lack of demand.

Morgan Stanley reportedly pulled mining magnate and Fairfax board member Mrs Rinehart's block trade of 117.3 million shares earlier this week amid little interest.

Full article here

Looks like Gina has had enough and she is just going to dump it.

Cheers,
Oracle.

 

[Dazz]

This reminds me soooo much of Ansett.

Workers demanding higher pay, workers demanding better rights, workers demanding not only a say how the company is run.....but in this case, full and utter control in what the product is they pump out.

I suppose the Directors are up in the boardroom doing what ??


.....and in the end, when the company goes bust, and all of the workers get laid off and go home with their tails between their legs and fess up to the spouse and kids that - on reflection - now that we are unemployed, that perhaps we did push just that little bit too hard.

Their union delegates and future Labor politicans will be all over them with support and condolances.....but the wage will be gone.

Perhaps when all of the journalists at the Age and the SMH get run off, they can all go down to Tasmania and live their ideals down there with their Green thought masters.

They won't have two bob to rub together, but never mind, some things are more important than money.

....and what of the ever so important independent editors ?? Where will they be in the great wash up ?? They'll be up the Swannie (literally) with the rest of 'em. Gone.

How any company, in as deep a doo-doo as Fairfax is, could brush aside the richest person in Australia after she'd bought a 18% stake in the company and tell her to get stuffed, she cannot have a say in how the company is run, we're doing a cracker job as it is thank you very much....beggars belief.

 

[Ausprop]

of course we can always create a special levy for next years tax return to pay out all the overpaid employee's entitlements and lock the directors up because they are white collar snobs from the Syndey beaches so that will make us feel great because we all think we are farmers working the land, burning the cane fields ala Barnesy style whose real skill was drinking what the cane produced more than doing a hard days work but we are all blue collar battlers that are underpaid by the liberal toffs. workers unite, bring down these corporate ivory towers!

 

[BayView]

This reminds me soooo much of Ansett.

Workers demanding higher pay, workers demanding better rights, workers demanding not only a say how the company is run.....but in this case, full and utter control in what the product is they pump out.

I suppose the Directors are up in the boardroom doing what ??


.....and in the end, when the company goes bust, and all of the workers get laid off and go home with their tails between their legs and fess up to the spouse and kids that - on reflection - now that we are unemployed, that perhaps we did push just that little bit too hard.

Their union delegates and future Labor politicans will be all over them with support and condolances.....but the wage will be gone.

Perhaps when all of the journalists at the Age and the SMH get run off, they can all go down to Tasmania and live their ideals down there with their Green thought masters.

They won't have two bob to rub together, but never mind, some things are more important than money.

....and what of the ever so important independent editors ?? Where will they be in the great wash up ?? They'll be up the Swannie (literally) with the rest of 'em. Gone.

How any company, in as deep a doo-doo as Fairfax is, could brush aside the richest person in Australia after she'd bought a 18% stake in the company and tell her to get stuffed, she cannot have a say in how the company is run, we're doing a cracker job as it is thank you very much....beggars belief.

LOL!

Yep; another eg was the report on the teev yesterday of Qantas making a $224mil loss last year.

They then cut to one of those Union boffins bleating about some issue or other with the Heads of Qantas and the impact on the workers.....I only had half of one ear on it as I do when Union boffs get a sound byte.

Now; maybe I'm really stupid, but it seems to me that if you are representing a group of employees who work for a company that is not traveling all that well, you might consider telling the employees to pull their heads in for a bit and not be too demanding of the hand that feeds...

Not much future in getting some small concession, then lose your job 6 months later I would think.

 

[Aaron_C]

Fairfax down to 45c and Gina trying to offload her stake (that she bought at about 80c per share). Ouch.

 

[Dazz]

Yeah, I'd say that ouch is reserved for everyone that works at Fairfax and the smaller shareholders.

For Gina, the loss would be the same as you and I walking down and buying the weekly shopping. Feel it for sure, but won't affect your life one iota.

 

[Dubstep]

Don't be surprised if Gina buys fairfax outright !