The idea behind presenting the data in this way is to give an indication of the potential companies on the list have for plugging pension funding gaps with their earnings. The table looks at pension deficits on their own as well as the deficits rolled in with similar liabilities: net debt/cash and long-term leases, such as property rental commitments.
The original table compared deficits, and other liabilities, with market capitalisation. The idea behind presenting the data like this is to give an idea on how rising pension deficits may affect a company’s market value and share price. The read across between a rising deficit and falling share price is based on the idea that the market gives companies an enterprise value (EV) made up of Market Cap + Net Debt + Pension Deficit + Lease Libilities. So if a company’s pension deficit rises, all other things being equal, market cap will need to fall by the same amount to keep EV constant.
Anyway, here’s version two of the Pension Deficit Danger List (version one can still be found on this blog, too):
| Name | TIDM | Price | Market Cap. | Pension deficit | Pen. Def. vs Mkt Cap | Pen. Def./ EBITDA | Pen. Def. + Net Debt/ EBITDA | Pen. Def. + Net Debt + Leases/ Lease adj. EBITDA |
|---|---|---|---|---|---|---|---|---|
| Hogg Robinson | HRG | 73p | £238m | -£258m | -109% | 4.6 | 5.2 | 5.5 |
| Trinity Mirror | TNI | 110p | £310m | -£305m | -98% | 2.3 | 3.0 | 3.2 |
| Renold | RNO | 39p | £89m | -£83m | -94% | 4.1 | 5.3 | 5.4 |
| Norcros | NXR | 158p | £96m | -£56m | -58% | 2.2 | 3.4 | 4.0 |
| Communisis | CMS | 40p | £84m | -£41m | -49% | 1.3 | 2.3 | 3.5 |
| Wincanton | WIN | 194p | £240m | -£106m | -44% | 1.6 | 2.2 | 4.5 |
| De La Rue | DLAR | 596p | £604m | -£220m | -36% | 2.5 | 3.7 | 3.8 |
| Carillion | CLLN | 262p | £1.1bn | -£394m | -35% | 1.6 | 2.4 | 3.1 |
| Mothercare | MTC | 129p | £220m | -£74m | -34% | 1.6 | 1.3 | 4.1 |
| GKN | GKN | 319p | £5.5bn | -£1.6bn | -29% | 1.9 | 2.8 | 3.0 |
| Mitchells & Butlers | MAB | 267p | £1.1bn | -£304m | -27% | 0.9 | 6.8 | 6.8 |
| Carclo | CAR | 134p | £89m | -£23m | -26% | 1.6 | 3.4 | 3.8 |
| BAE Systems | BA. | 548p | £17m | -£4.5bn | -26% | 2.3 | 3.1 | 3.6 |
| Thomas Cook | TCG | 73p | £1.1bn | -£272m | -24% | 0.6 | 0.8 | 1.9 |
| Morgan Advanced Materials | MGAM | 297p | £848m | -£205m | -24% | 1.5 | 3.2 | 3.4 |
| Tesco | TSCO | 166p | £14bn | -£271m | -23% | 1.2 | 5.2 | 5.9 |
| FirstGroup | FGP | 113p | £1.4bn | -£271m | -20% | 0.4 | 2.9 | 4.1 |
| Charles Taylor | CTR | 297p | £200m | -£40m | -20% | 2.0 | -0.9 | 0.8 |
| Atkins (WS) | ATK | 1,548p | £1.6bn | -£286m | -18% | 1.7 | 0.9 | 2.5 |
| BT | BT.A | 390p | £39m | -£6.4bn | -16% | 1.0 | 3.1 | 3.3 |
| AA | AA. | 303p | £1.8bn | -£296m | -16% | 0.7 | 7.8 | 7.8 |
| St Ives | SIV | 126p | £179m | -£28m | -15% | 0.7 | 2.3 | 2.7 |
| Brammer | BRAM | 138p | £179m | -£27m | -15% | 0.7 | 3.2 | 4.2 |
| Devro | DVO | 233p | £389m | -£56m | -14% | 1.2 | 3.8 | 3.9 |
| TUI | TUI | 1,020p | £6.0bn | -£827m | -14% | 1.1 | 1.3 | 1.8 |
| Flybe | FLYB | 53p | £115m | -£15m | -13% | 0.3 | -0.9 | 4.2 |
| Smurfit Kappa | SKG | 1,925p | £4.5bn | -£604m | -13% | 0.8 | 3.6 | 3.9 |
| Kier | KIE | 1,263p | £1.2bn | -£154m | -13% | 1.2 | 2.6 | 5.1 |
| Menzies (John) | MNZS | 580p | £356m | -£43m | -12% | 0.7 | 2.6 | 4.8 |
| Synthomer | SYNT | 350p | £1.2bn | -£139m | -12% | 1.0 | 1.6 | 1.8 |
| Dixons Carphone | DC. | 383p | £4.4bn | -£474m | -11% | 0.8 | 1.2 | 3.3 |
| Costain | COST | 340p | £349m | -£37m | -11% | 1.0 | -2.0 | 3.9 |
| Lookers | LOOK | 134p | £530m | -£55m | -10% | 0.5 | 2.0 | 2.5 |
| Evraz | EVR | 140p | £2.0bn | -£205m | -10% | 0.3 | 4.7 | 4.7 |
| McBride | MCB | 176p | £321m | -£33m | -10% | 0.6 | 2.4 | 2.7 |
source: Ionic Information/Sharepad
