Johnston Press Gets Hit Hard by Recession
www.johnstonpress.co.uk
The shares of Johnston Press, the regional publisher, declined over 25% while the group cut their dividend and posted a £429.3 million pretax loss. After a write down of the value of their newspapers at £417.5 million, the troubled group began to fall into the red. Revenues dropped 12.4% to £531.9 million for last year. The year before, Johnston Press had a £125 million pretax profit.
The decline in motoring, recruitment advertising, and property has hit regional newspapers hard. John Fry, the new Chief Executive Officer of Johnston Press, said that revenues in advertising fell by another 35.9% since the beginning of the year, as well as warned that the fall is expected to continue. During the short-term there is not much prospect for the advertising cycle to change, and their expectation is for the year to be very challenging with revenues way below the levels of last year and only partially offset by cheaper costs, he added.
Fry also commented on the ongoing review in the sector by the Office of Fair Trading, saying that consolidation in the industry will be beneficial for readers and advertisers. There has been ongoing speculation of a merger between Johnston Press, Trinity Mirror, and Archant, which are two of the publisher’s rivals.
The debt of the company stood at £476.8 million when 2008 ended, which is down by £220.9 million from the year before. Fry said that one of the main focuses is to make sure that their banking facilities are re-financed successfully, which expire in September of next year. The publishing group also confirmed that they were looking into selling their newspapers in the Republic of Ireland, as revenues dropped by 22.6% here last year.
Learn more at: www.johnstonpress.co.uk