Earnings: UK's Johnston Takes Big Investment To Off-Set Ad Declines, Debt

This story was written by Robert Andrews.
Debt-ridden UK regional news publisher Johnston Press is buying (or rather, selling) itself a financial lifeline in the struggling regional classifieds market by taking a 212.3 ($414 million) investment from Malaysian investment unit Usaha Tegas. The company is issuing 320 million new shares at 0.53 each (that's 61 percent less than last night's share price) for a 20 percent stake, with the proceeds due to be used "to strengthen the group's balance sheet and improve the group's credit profile by increasing its equity and correspondingly reducing net debt".

Johnston ad revenues fell 7.1 percent in the 17 weeks to April 26, today's earnings show, blamed on "falls in property, employment and motors advertising" - Johnston's core business. And Johnston has debt of 700 million. But is the cash injection anything more than a sticking plaster? The company said it was "prudent" to take the cash "given the recent reduction in consumer confidence, and deteriorating economic forecasts".

Though print advertising was down 9.1 percent, digital grew 56.8 percent.

Financials & Release


By Robert Andrews
  • CBSNews

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