Regional publisher Johnston Press has today unveiled its long-awaited refinancing package with up to £360m to be raised from the issue of shares and bonds.
The company announced last December that it had agreed a deal with lenders to defer repaying its £300m debt until autumn 2015 to give it time to put a long-term refinancing package in place.
Under today’s proposals, the publisher will issue around £220m worth of bonds and raise a further £140m through share issues and placings.
JP has also announced an advertising tie-up with Sky TV which will enable businesses using its print and digital platforms to use Sky’s AdSmart product, which lets them target their TV advertising at specific local markets.
As part of the deal, Sky has agreed to invest £5m in buying 13.6m of the new shares being issued by at a price of 17p per share.
The regional advertising partnership will initially be rolled out in two markets – Nottingham, Derby and Sheffield, and Milton Keynes, Northampton and Peterborough.
JP chief executive Ashley Highfield said: “Johnston Press has already achieved much in turning around our business performance, with 2013 marking a return to underlying operating profit growth for the first time in seven years.
“The refinancing of the business is another key milestone for the company and I am delighted to be announcing this capital refinancing plan.”
Commenting on the Sky agreement, Ashley added: “Johnston Press has been focused on its vision to become a truly multimedia business over the last two years. This agreement with Sky is testament to the platform we have put in place.
“That Sky has further demonstrated its conviction in our strategy by investing in our business is particularly encouraging.
“The strength of our sales team network and our relationships with small and medium-sized enterprises across the UK position us well to deliver a comprehensive portfolio of advertising and marketing solutions.
“We already have 300,000 local business customers who benefit from our expertise and it is exciting that we will now be able to offer them Sky AdSmart local.”
Andrew Griffith, Sky’s Managing Director, Commercial Businesses, said: “Sky AdSmart local helps level the playing field for local businesses. They can now compete effectively with national brands, using the unique brand-building power of TV.
“We are looking forward to partnering with Johnston Press with its considerable experience of working alongside local communities and its market-leading role in building successful local digital media platforms.”
JP also unveiled its latest interim management statement this morning, reporting continuing growth in digital revenues in the first 17 weeks of the year although no detailed figures were given.
It said: “The group has continued to build on the good progress achieved in 2013, with continued strong growth in digital revenues, as well as a slowing decline in print advertising revenues compared to the equivalent period in 2013.”
The statement revealed that in March 2014 the group’s digital audience grew to 15.9m unique users, a year-on-year increase of 42pc.
Its mobile offering also continued to grow and in the first quarter of 2014, average monthly unique users reached 6.4m.
The statement also reports on the launch of NewsEye, a new product offering enhanced video content across a number of newspaper companion sites including those of The Scotsman, Yorkshire Evening Post and The News (Portsmouth).
It concludes: “Although the economic outlook is not without challenges, the group continues to see momentum in the business, underpinned by the re-structuring and re-focusing of the business and an increasingly stable advertising market.”
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The headline says SKY is going to invest in JP, however they are partnering in JP, a big difference… and it is with the dreadful adwords which make pages look dreadful.
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Ashley added: “Johnston Press has been focused on its vision to become a truly multimedia business over the last two years.”
Pity they didn’t focus a bit on how to avoid racking up a mountain of debt.
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And on this news the share price has dropped by 26%
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Share price slips 27%, market shows confidence in the refinance
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Highfield & Murdoch! Sounds like some woeful 80’s cop duo.
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If it eases the financial pressures on the day-to-day running of the business and allows more investment and less cost-cutting, this is good news, isn’t it?
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Hurrah !
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Amazing – this story has been posted for a whole morning and the normal parade of JP stone-throwers have so far failed to weigh in with their usual brickbats. Could this mean that it’s actually good news for a change? Fingers crossed…
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Herts hack, maybe everyone is just getting tired of commenting on this shower.
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It’s all about advertising. There’s no mention of the core product for viewers and readers. Doesn’t “news” matter any more, or are they just thinking of the short-term while planning a long-term get out?
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The Sky token £5m is neither here nor there as adwords make pages look dreadful, this could easily drive people away from the digital sites (i certainly click away from any pages that use it).
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for multimedia platform read digital. The papers are fading away and sales have fallen off the proverbial cliff. But surely anything is worth a try in JPs situation. Let’s look on positive side.
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The paper sales may be falling and digital hits up, but income is generated from papers sales and advertising within that, not the websites. Not being positive or negative, just stating the obvious. The fact that JP outsourced ad production, a vital source of income, to save costs and now accept poorer quality, and have made redundant other professionals in favour of UGC and photos shows that they have no genuine interest in saving the newspapers. AH and his cronies will be long gone when they’ve been decimated and digital isn’t making money. But they’ll have filed their pockets!
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Shares continue to tumble, 24p last Thursday , 15p today. About a 40% drop in two days of trading. Might buy some when they drop to 3p
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Amused they intend tageting Peterborough, the once a week newspaper is already stuffed full of fillers, apart from council press releases and a weekly Westminster Pondlife polemic by the seriously strange MP for only the central part of Peterborough Stewart Jackson. Sports page on local team POSH is good and that is the only reason the majority of print sales are made. If they rehired a few hacks it might be better but like the JP share price ….its in terminal decine. I give it 3 years before being merged and the newsroom moved to Birmingham… http://parkfarmneighbourhoodwatch.blogspot.co.uk/search?q=Labour&max-results=20&by-date=true
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I got out of JP with cash – WOOHOO!
Life doesn’t get much better.
My advice to those that are left.
Get out.
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JP Cost Cut Victim. I agree. JP will learn too late that it cannot make enough money from websites. By then its weeklies, now pathetic imitations of the proper local papers they were a few years ago, will be dead or dying. The number of hits on websites may be up, but in volume they are relatively insignificant as far as advertisers are concerned. That is the problem facing not just JP but other media circuses. Digital just not making enough hard cash.
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I am not an employee of Johnston’s but I deal with them on a self employed basis.
I am older now, I have had much experience in the press and I have to say I have never known such a ‘bunch’ as Johnston’s. In that time I have seen their offices crumbling into places that are unfit to work in and journalists, particularly young ones, being treated like imbeciles. One journalist told me that they are expected to take photographs on their mobile phones. Are JP having a laugh?
In the 90s I saw them buy up local papers like sweeties and watch them ruin them.
It was sheer greed that put them into their awful debt.
I have been trying to contact someone for months in the organisation and he has never once got back to me.
I have seen the quality of the newspapers fall into the abyss. Photographs are awful, as is subbing. The mistakes, if they are not serious, are at times hilarious.
One headline on a local paper said ‘Draught plans are put on hold by the Council’ Good grief!!
Having said this, I have to hand it to the journalists that they can produce papers with the tools they now have. Talk about a silk purse
out of a sow’s ear!!
To add insult to injury the bosses are now going to draw huge bonuses.
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