The UK’s Centaur Media Plc is keeping The Lawyer and bringing to end its six-month divestment programme which has generated net proceeds of almost £20m from the sale of magazine and event brands including Money Marketing, The Engineer, Employee Benefits, and The Meetings Show. The decision to withdraw The Lawyer from sale is believed to have come after disappointingly low offers for a major B2B brand which many had predicted would fetch £30-40m. It is believed that no offer was received above £25m for The Lawyer which has some £8m of revenue and potential profit of £2-3m. It has increased its digital income five times in three years. It’s a highly attractive growth platform that should never have been put up for sale.
The slimmed-down Centaur (Marketing Week, the Festival of Marketing, eConsultancy, Oystercatchers, The Lawyer et al) may be almost able to maintain its existing profitability, through £5m+ overheads savings including an office move out of London’s West End. Last year, these retained activities accounted for an estimated 70% of Centaur’s £70m revenue. Elimination of the company’s long tail of marginal and loss-making activities (albeit including some profitable exhibitions and financial media) will, therefore, increase profit margins. It will also give Centaur the managerial bandwidth to fulfil the company’s potential, especially internationally.
This is a smart, innovative company that has never quite been able to replicate its 20th century success as the UK’s most prolific creator of weekly B2B magazines, stuffed with classified ads. Now it has the chance. But the next moves and the scale of Centaur’s strategic ambition may depend on the 38-year-old publisher’s complicated relationships with shareholders.
Ahead of an announcement about whether any or all of the sale proceeds will be returned to shareholders, the main strategic question for the £70m listed Centaur is obvious: How will the company now accelerate its growth? Incredibly, investors in this under-loved B2B media company are split between those who want a special dividend or share buy-back and those who expect it to use the cash (and borrow more, if necessary) to expand, especially in data services and beyond the UK. The pause before announcing the next steps implies a process of persuading some feisty investors to support the ambitions of CEO Andria Vidler and her board, now with its fourth chair in five years.
Analysts are hoping for a transformational deal. First on the list may be the £40m UK listed media-marketing consultancy Ebiquity, which would be a great fit. A deal would combine two sub-scale listed companies with complementary skills and revenue, and unlock global growth prospects. Talks must have been taking place. More challenging may be the privately-owned £120m-revenue Mintel International, in the UK, and the smaller MediaPost, in the US. But there are other prospects also among media-marketing publishers in Continental Europe. Get ready.