Regional publisher Johnston Press says it is continuing to explore the possible sale of some of its 200-plus local newspaper titles following the acqusition of national daily the i.
In a trading update issued this morning ahead of its annual general meeting later today, JP revealed a 13.7pc drop in revenues for the first four months of 2016.
This included a 5.7pc drop in digital revenues in the period January to March, although this was followed by a 4.5pc increase in April.
The update reported that overall advertising revenues for the period were down 16.9pc on those of the previous year.
It said: “The sector has continued to experience challenging trading conditions and volatility in the advertising market in the first quarter, which began to show signs of improvement in April.
“Johnston Press remains focused on increasing audiences, providing creative solutions for our advertisers, further cost reduction and integration and growth within the i.
“The group has continued to invest in relaunching websites for our primary titles including rolling out 15 new fully responsive, mobile-first platforms giving users a better, faster experience on any device.
“Following the completion of the i acquisition, we continue to explore the disposal of certain assets, with a view to deleveraging the balance sheet and further reducing financing costs.”
Earlier this year the company announced it had identified a series of assets for potential sales following a “portfolio review.”
It said the titles in question either fell outside its selected markets, or did not match the audience focus, or did not offer the levels of digital growth sought by the group.
At the same time, it identified a list of 59 daily and weekly newspaper titles which it considers to be “sub-core.”
However the regional publisher has repeatedly denied that the list – which includes the Wigan Evening Post and Scotland on Sunday – amounts to a catalogue of the titles it plans to sell.
Today’s update revealed what the company termed “contrasting trends” in digital revenues with recruitment advertising performing poorly and display advertising relatively well.
Digital employment revenues were down 22.8pc in the period January to April, while digital display and transaction revenues were up 5.8pc in the period January to March and 15.6pc in April.
The company said the latter increase had been driven by “strong growth” in its national display advertising platform 1XL and in Google ad word sales.
JP’s digital audience grew by 22.7pc on average year on year to 24.1m unique users in April, with over half the audience now viewing content on a responsive site.
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“We continue to explore the disposal of certain assets, with a view to deleveraging the balance sheet and further reducing financing costs.” Uh oh, JP people, this doesn’t sound good. I think a plain English translation would be “we’re scrapping or flogging off papers because our performance has been so dire.”
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Oh heavens. I wish someone interested in good quality journalism would buy and rescue my once-excellent JP weekly, now a sad quasi-regional rag just thrown together in a news “pool” .
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The sub-core papers won’t be sold, they will be closed.
Many of them are in areas where there is a direct rival and sales are through the floor.
You wouldn’t get a fiver for them.
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Going by the quality of the JP papers I have recently seen, its no wonder businesses have cut their advertising. Plus why buy a paper when all the content is on the web before the paper is on sale, not to mention the cover price.
Although I am surprised the share price hasn’t moved (from 0.8p in old money) with the purchase of the i. Company value is still only £40m despite adding a £24m paper to the portfolio. Would be interesting to find out where the £24m came from. Time for a new CEO
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Well done, Ashley and Co. You’ve wrecked newspaper after newspaper, the share price now stands at 38p (or 0.75p if the truth be told) and you’ve ruined so many lives. Some papers are so dire, you’ll have difficulty GIVING them away. Such geniuses, introducing the templates, the cut-and-paste culture, the toxic newsroom of the future, etc. Your culture of greed, stupidity and arrogance hasn’t worked and you wouldn’t listen to anyone. The rubbish you’re turning out isn’t fooling the beleaguered staff, the astute advertisers or the dwindling band of readers. I do hope that you attract buyers who know and care. Sadly, it may be too late. Think digital!! (I wonder where Ashley will surface next…)
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The industry is an absolute basket case. I can’t think of any other that raises prices and cuts quality to the extent that newspapers do then expresses bafflement when people stop buying it.
“Read all about it (or don’t, as the case may be) in your latest edition find all your darts, bowls and local news missing because we axed the sport editor and copy taker, check out the lack of schools pics because we axed the photographer, and marvel at the in depth analysis from a reporter who’s never set foot in your town – all for the bargain price of an extra 25p compared to what you were paying three years ago”
What’s this you say? You don’t want to buy it? Behold! Challenging trading conditions!!!
I might open a burger van that sells lettuce on a bap with no burgers and see how long it lasts.
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“….providing creative solutions for our advertisers…”
Clearly not as they’ve voted with their feet and walked away!
What a load of old bull
“Creative solutions” appears to be a buzz word in the regionals these days but no one I speak to knows what it means
They’re neither being creative or providing solutions as far as local businesses are concerned, anyone care to enlighten me if they know?
Interesting to see both the print and now digital revenue pillars collapse, makes you wonder just where they’ll get their revenues from ‘going forward’ apart from buying, selling and closing other businesses I guess
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Pinky, it’s quite bizarre. Don’t know about Johnson but TM abandoned many local advertisers in favour of national ones, as a result a lot of local papers and magazines are springing up to take that advertising cash. The baby has well and truly been thrown out with the bathwater. The Red Barron was less brutal at managed declines than this lot.
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@Pinky–
Creative solutions usually means some wizard new wheeze that makes the suits look like they’re actually doing something to justify their continued presence (as opposed to all the people who actually, you know, produce stuff) while making sure that said ‘new thing’ doesn’t actually cost any money….
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A business model that relies on cost cutting instead of business development and growth to deliver results for shareholders is inevitably heading for insolvency or a takeover. JP can stave off the inevitable with actions like this but it’s only a matter of time. That applies equally to Trinity Mirror.
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This could become a good news story if a buyer can be found. The Edinburgh titles have become a pale shadow of their former selves, victims of the Johnstone Press ‘death by a thousand cuts’.
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When the big sale starts, it will be interesting to compere the prices the newspapers are sold for, compared to the £millions that JP paid for them…
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desker. good point about competition. In some areas, especially south, JP is lucky that it has no serious competition for its ailing weekly papers. Otherwise they would be out of business.
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Can anyone with more biz knowledge than me explain how a company with such a low (real world) share price survives? It’s like a football team playing on one leg the whole season and somehow avoiding relegation.
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Jeff Jones – they express bafflement because they don ‘t have the remotest slue what they’re doing.
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@Adrian
What are these “results for shareholders” you are talking about? Do you know something the rest of us don’t? The only result shareholders have seen from JP’s failed strategy (and does anyone else detect a fatalistic, defeatist tone in the latest statement?) is a catastrophic loss in value. Jeff Jones and Sad have put the situation well in their comments.
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No doubt about what the key statistic is here.
The 5.7% decline in digital revenue must have been an incredibly painful number to publish.
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As a reporter on one of JP’s titles, I am frightened for the future of the company and the industry as a whole. Will my paper be the next to be axed? If it is, I’m sure I’ll be the last to know. I have a mortgage and bills to pay. A throwaway decision by a JP fat cat could, I fear, realistically see my house repossessed.
In just three years, the team I joined with such enthusiasm and fervour has shrunk considerably – without those who left/were made redundant being replaced. There were three reporters, a sports reporter, a staff photographer, a news editor and a dedicated editor. Now, it is just my content editor and I. The work load has increased, and now I cover three major towns and several villages single-handedly, the best I can. Entertainment listings, faith news, school news, community news – all gone.
And when my content editor was off ill a few weeks ago, I was expected to get three papers off to press almost solo – with phone-based help from an editor based more than 20 miles away from our office (which, incidentally, is another 20 miles in the other direction from the patch we report on, but that’s another story…).
I did it, by the skin of my teeth, but I was ashamed. Ashamed of the content and the ‘that’ll do’ mentality I have been forced to adopt through the sheer lack of staff and time to cultivate thoroughly-researched pieces of journalism.
I find myself churning day after day; to get stories in print, online, on Facebook, Twitter, Social Flow. It breaks my heart to see my once great local paper shunned by readers. I frequently get told, both in person and over the phone: “I never buy your paper, it’s rubbish. It’s full of adverts and no real news.”
And isn’t it a sorry state of affairs when the reporters agree with them? I find myself without a leg to stand on. All I can say is: “I try my best with the resources I have.”
My dream would be, if I had the money (which will never be possible on a junior reporter’s wage!) to buy back my once-great local and make it an independent again. But in reality, I feel my only option is to get off this sinking ship and find another job.
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I remember when JP closed down its receptions to the public to save the very small costs to keep it open. I saw a grown adult cry on the day they had to leave, for then the company to award Ashley Highfield in excess of £1.5 million in wages and bonuses.
‘Trends’ should not be used as an excuse for a reduction in revenues. If you constantly cut back, rely and shared content, readers can see through that.
Unfortunately, JP has no real regard for its print editions or its staff. I trained at university to go into something I thought I would love; how wrong was I? I’ve been totally put off for life.
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But don’t forget profits still 20%. This isn’t a news business, it’s an asset stripping machine to pay off debt and reap rewards. The notion of funding from the BBC is disgraceful.
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My revamped JP weekly used to allow people to upload content directly to its website. I looked yesterday and either they’ve removed the link or made it so difficult to find that I gave up. So much for ugc!
The website is very slow to load, carries court cases which happened weeks ago and other news from places half a day’s travel away.
To cap it all, there were no copies on sale at my local shop on publication day, and none three days later. It used to be a cracking paper but isn’t now and the website is not worth reading either.
There have been some very large (£57k x 2) share sales this morning on the latest ‘exciting’ news from JP. Says it all, really.
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Well said Jeff Jones. Many more things are missing from so many of the current publications, most notably court reports. Very often people didn’t buy their local paper for one particular reason (apart from local news) but because it gave them a comprehensive round-up of all the things they wanted to know. I can’t blame the staffs at these papers now, most of them are indeed doing their very best in an impossible situation. But there certainly are other people to blame. They know who they are and they should be ashamed of what they have done – and are still doing.
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No mention of the fabled digital tipping point then?
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Sell them? Most are so bad they couldn’t give them away.
I’m feeling flush at the moment. Will three quid buy the Hartlepool Mail?
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Companies like Johnson Press remind me of a villain from the 80s comedy Space Balls called Pizza the Hutt. An alien gangster made out of pizza, he got locked inside his own limo and ate himself to death.
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Sorry Harry, at a push I’ll go £3.50. But be warned, I’ll not get involved in a bidding war.
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JP Journo.
I went through exactly your professional hell at a JP paper I once loved working for. It fell to pieces before my eyes and I could not walk into town without someone asking me to do something about the paper.
My so-called line manager told me just to get on with it!
I was lucky enough to get out and find another job, but I know others are not.
The decline in digital is truly alarming, because JP has all but killed the paper goose.
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I despair. The bosses seem to know nothing about what makes a good paper tick and persuade people to buy it. They buy it because they want to read what is happening in their area. But for too long now the concentration has been on putting advertising too much at the forefront of the game. How different it all was when I started 51 years ago. The emphasis then was on good quality journalism. I am NOT criticising those journalists who `are doing their best but they must feel they are trying to push jelly up a hill.
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Harry Blackwood is right. These titles are of no value. Why buy something that is broken. No takers came in for the Bhm Mail a few years back.
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I’ll offer £2, ye bidders for the JP rags. Judging by the ten of £millions they paid from their original ‘war chest’ for the alleged ‘cash cows’ all over the British Isles, they’d be stupid enough to accept!
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Worth noting that all this great news from Ashley has certainly done the trick with investors. More than 400,000 JP shares were sold today and the share price is now very close to its all-time low.
They should take my £3 offer for the Hartlepool Mail while it’s on the table.
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I worked at JP for 10 years before talking VR. What was Beyond me is how so many from relatively upper management go around pretending that everything fine. I know it’s good to keep a positive mindset, but I made me think of people on a sinking ship denying that it was going down. It’s just weird.
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My elderly parents have finally stopped buying the Wetherby News after 40-odd years.
They say there’s nothing in it. It misses the news from Wetherby and stuffs the paper with content from Harrogate that people care little about.
Wetherby and its neighbouring towns and villages are prosperous and the paper should be a profitable success. If it does make a profit , it is because JP spends next to nothing on editorial.
I know town council isn’t covered for starters, which for me is a rich source of community news.
I am currently working for Newsquest in the south east.
True, resources are tight but we cover the basics and still put out a decent product.
This week, i wrote about pubs being declared Assets of Community Value. Papers should have similar status. Something needs to be done to encourage JP to offload newspapers to the community and to people who might care about the papers, serve the community better, while still making a living.
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I feel so sorry for Hell in a Handcart. Obviously a young reporter doing his/her utmost to hold back the rushing tide of greed created by a company that simply doesn’t know nor care what’s going on. Get out of it HIAHC. It isn’t worth it making all that stress for yourself while the likes of Ashley Highfield count their £millions and laugh up their sleeve, contemplate where they can next spin their web of ineptitude, while poor sods like you (there are hundreds in JP) strive to make ends meet.
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I’m former JP (advertising admittedly). I finally escaped last year and now work in Marketing. I was approached only this week by my former title informing me they have a “Fantastic half price offer on digital” Oh JP, print revenues are in freefall, and now you’re having to cut digital too? Not a good sign..,,
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Flossie the sheep.
My JP rag has not sent a reporter to a town council meeting for at least three years. Its sport is written entirely by unpaid contributers and poorly edited.
It is frequently beaten to community stories by some local amateur website because the website has people based on the patch whereas the JP hacks are 20 miles away.
No wonder the share price is dismal.
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i remember – many moons ago – Ashley issuing one if his wonderful encyclicals that now we must concentrate on raising the share price. I think he had just returned from his chocolate holiday cottage in Umpah-Lumpah Land. Word has it that he’s inviting the Queen to declare open his latest website on the Isle of Ulva in the Inner Hebrides. It’s uninhabited. But what the hell…
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when I worked for JP’s predecessor to RIM, UPN they:
1) covered ever court session at mags and had a dedicated Crown Court correspondent. It also paid for agency copy from courts around the country and abroad
2) had a lobby correspondent in Parliament
3) had dedicated political writers
4) had a features team covering local events and big interviews with celebs visiting the patch
5) had photographers who knew a story and guided rookie hacks
6) had sports teams and paid for match reports for games they didn’t cover, and also paid for cycling columns, athletics content and angling news
you can say what you want about subs etc but to lose all the above is criminal, especially as the features pages are now PDFs produced elsewhere with no local content
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Resigned, it’s all going according to plan on the shares front. Not.
Hundreds of thousands sold the other day and the price dipped to another low today at 38.25.
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Guys, it’s all very well laughing at the papers (especially those marked as sub-core) but it’s not the paper’s fault that they are so bad. It is, as you already know, the management.
Someone with great ideas, a commitment to quality and hard work could turn around even the worst of these lacklustre rags within six months. It would take a little longer to get back into profit, I’d think 18 months to a year, but it could be done.
So really if I could pick up one of these for a few quid I would at a shot…. but while I’d buy the paper, I wouldn’t give you tuppence for their poor management.
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