Well, not really. Johnston isn’t going to be bailed out by any government.
Johnston Press is the “newspaper equivalent of HBOS and Northern Rock”, according to a union official on the company’s Leeds-based papers, where journalists have voted to go on strike for eight days later this month over compulsory redundancies. MediaGuardian
Johnston Press share price falls to 6.2p (down from 420p November 2007), possible breach of banking covenants due to large debt, possible collapse of publishing group:
“The lack of an effective digital strategy, few apparent plans aside from further cost cuts, and concerns over refinancing debt are the main reasons cited for the share-price collapse. However, it was the publication of an interim management statement earlier this month that precipitated the plunge. Reflecting the wider industry trends, classified advertising at the company between August and November had fallen sharply year-on-year. The most noteworthy figure was the 48.4% drop in revenue from property advertising.” http://tinyurl.com/57qe8v
Yesterday, Andrew Walsh, a media analyst with stockbrokers, Teathers, was quoted by Reuters, saying: “Whereas we [recently] saw a covenant [repayment undertaking between Johnston Press and its bank] breach as improbable, in the wake of the IMS, this now looks likely on our revised numbers.” http://www.allmediascotland.com/articles/3313/19112008/johnston_share_price_suffers_another_plunge
The Northants Evening Telegraph and the Northampton Chronicle & Echo are moving to overnight press times with morning distribution; continuing the current trend for changing distribution patterns in the UK regional market. With evening newspaper title circulations in decline, the pressure to provide extra on sale time has made the move to overnight publishing more attractive for many publisers. The local presses associated with these titles will close as a result. The restruscturing of printing in Johnston Press will result in redundancies, with reports suggesting between 6 to 70 jobs at risk.
MediaGuardian Coverage: http://www.guardian.co.uk/media/2008/aug/01/johnstonpress.pressandpublishing
Johnston Press: http://www.johnstonpress.co.uk/jpplc/investorcentre/
- Update: Johnston Press has announced further redundancies and restructuring; its London based online Jobstoday.co.uk ad sales office is to be closed, and the MediaGuardian reports possible redundancies in its Edinburgh based Scottish operations.
Johnston Press facing £700m net debt ( April 2008 ) and a market captialisation of £330m plans to raise £212m in a discounted rights issue. The share price fell 21p on this news to 114.75. Malaysian group Usaha Tegas stake in Johnston Press will rise to 20% as a result.
Press coverage from sharecast: Johnston Press
Johnston Press group in “perilous” position: