In an internal memo, which has been seen by HTFP, the regional publishing boss says the company’s “not inconsiderable” profits are all being absorbed in debt repayments.
The company has so far reduced its debt from £351m to £336m this year and Ashley said he aimed to get it down to £250m by the end of 2014.
In the memo, in which he also thanked staff for their “amazing tenacity and dedication,” he said the company’s strategy was starting to work and that its newspaper titles were in “excellent shape.”
Said Ashley: “Our mission is straightforward: by 2015 we need to have paid down our debt sufficiently so that we can get the banks off our backs – they are currently rapaciously sucking up all our (not inconsiderable) profits – so that we can build and invest for the future.
“In spite of the considerable fees the banks charged us for the privilege of borrowing their money, and some additional costs of restructuring, we’ve paid down our debt so far this year from £351.7m to £336m. We need to get it down to something like £250m by the end of 2014 to allow us to find alternative (and way cheaper) sources of funding. We can do this.”
He again defended the strategy of increasing cover prices, saying this had helped offset declining circulation revenue overall.
“We historically gave our papers away way too cheaply – they were essentially subsidised by classified advertising revenues – and now we need to charge a fair price for an excellent product. It’s fair to say there are some readers who will lodge a protest vote against price rises in tough economic times, but we can, and must, win them back one by one,” he said.
In an interim management statement last week, the company said that while overall revenues were down 11.4pc in the 18 weeks to 3 November, the relaunches of 54 paid-for titles this year has helped to slow down the decline in circulation revenues, which stood at 0.5pc for the period.
It said circulation revenues at the 31 newspapers relaunched in the second half of the year were up 13.8pc year-on-year immediately after relaunch.
Added Ashley: “Despite a year of enormous change, and considerable upheaval for many, I think our titles are in excellent shape.
“2012 has been a critical year on this journey and we’ll start to see the fruits of all your hard work during 2013 – and then aim to get the banks off our backs in 2014.”