Regional publisher Johnston Press has warned of likely cost savings in the second half of 2018 amid “continued pressure” on the group’s revenues.
In a trading update issued this morning, the group said revenues fell by 9pc year-on-year in the period 1 January to 31 May.
It said the introduction of the new General Data Protection Regulations (GDPR) at the end of last month had hit digital advertising revenues and described the trading environment as “extremely challenging.”
Today’s AGM will see the group’s chief executive Ashley Highfield step down after nearly seven years, to be replaced by chief finance officer David King.
The trading update says that while overall group revenues are down 9pc, the i newspaper continued to perform strongly and expectations for the full year were “in line with market expectations.”
It goes on: “The trading environment remains extremely challenging, exacerbated in recent months by uncertainty around future paper costs and the impact of GDPR on digital advertising revenues.
“We expect to see continued pressure on revenues in the second half of the year, and a requirement for cost savings.”
The update also revealed that no agreement has yet been reached on the refinancing of the £220m of bonds which become due for repayment on 1 June 2019.
Last November, an ad hoc committee of bondholders was set up to look at potential changes to the group’s capital structure and possible changes to its pension schemes.
It said today: “No agreement on these potential amendments has been reached. However, the group is continuing to work with the ad hoc committee and its other stakeholders on a number of alternative strategic options for the restructuring or refinancing of the bonds prior to June 2019.”
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Sack all the journalists but hold on to the admin wonks – that’ll do it.
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‘Cost savings’ = Redundancies.
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If Ashers hasn’t been able to get agreement on refinancing then is it realistic to expect anyone else to cut a deal?
As for cost cutting, I gave up reading my local JP weekly a while ago, because I’m not interested in reams of charity/free puffs for local businesses. I see that this week the website is asking us how to improve our “High Street”. We don’t have one.
Do they really think the readers won’t notice this amazing gaffe?
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As a now retired journalist having completed more than 50 years in the industry I am fed up with bosses saying time and time again there have to be savings on costs. Nowhere do I read or hear any of them say how they are going to boost the coffers by promoting the papers (oh that will cost too much !!). For what it is worth I remember an MD moaning years ago about the cost of producing a particular magazine. Being a cynic I said “well there is an easy way to save costs” he replied ” how” to which I said “close the place down. That will save a lot of money.” He didn’t speak to me for some time but at least he stopped countering on and on about “saving costs”> Of course you don’t want more money spent on an project than is actually needed but let’s spend a bit on promoting the work of those who work at papers. As someone else said: cost savings usually means redundancies and that means the quality of the product will go down even further (no disrespect to those left behind to fill the widening gaps).I would be like Rolls Royce or other car manufacturers saying “oh we are going to save costs by taking the seats out” and then wondering why nobody buys their motors.
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It’s the Telegraph story that HTFP really need to dig into.
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Telegraph reported that JP may hand over control to US hedge fund GoldenTree, and that the company is seeking a regulated apportionment agreement (RAA) to detach its pension scheme ahead of a company-wide restructure.
No wonder Cashely jumped, he knew it was all going Pete Tong.
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Harken to the sound as the whetstones trundle once more……
@Journo McJournoface – -are you my long-lost brother? 😉
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The last trading update told us there were signs of spending returning to print. It had just fallen off a cliff and JP tried to make good of that by saying it was showing signs of improving. Those of us with experience of JP knew better. We also know why Ashley had to go and that is because control of the company will soon switch hands. Further cost cutting means the smaller newspapers going online only which is now the only way to save money on staff costs, and that will give the readers a product which is little more than a church bulletin – without salvation!
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To report a further loss, this time 9% down on an already crippling figure the previous year must prompt those in charge to take action and make changes, not just passing the baton to another of their own who’ll carry on as before, unchallenged.
Yes further jobs will be cut and no doubt even more redundancies announces but cutting jobs further down the food chain are drops in the ocean, the changes need to come from board and middle manager level, it’s those who’ve allowed ongoing under performance to happen unchecked and it’s there the cuts need to be made.
@wordsmith; They’ll not invest in the papers, they’re a lost cause as the latest figures show,and @WYA their naive proclamation that ad revenues are on the up fooled no one and just goes to show how out of touch they really are or how they think the shareholders will believe anything they tell them in an effort to buy time and hold on to their well paid jobs they’re clearly no longer capable of keeping.
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Johnston Press ruined my life from the day they walked in the door. As a freelance for them now they are paying buttons and refusing to pay mileage even though as a photographer I drive miles and miles for them every week. Now they are gonna mess with my pension. Are these leviathan gonna cause trouble for me and many like me for the rest of my life. I have NEVER seen such INCOMPENENT management in my life. The fools couldn’t run a bath!!!!
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The fact is that the audience for local news is in decline and all you can do is slow the descent, not alter the trajectory. There have been some horrific decisions taken by JP which have hastened their collapse but all this has done is altered the time scale, not set the course for failure.
Media consumption has changed irrevocably and there’s little point in going all “king Canute” by clinging on to an era that is now over.
In the last 4 decades publishers have seen off commercial radio, commercial TV, free sheets, supermarket pick ups, teletext, direct marketing etc. we’ve fought well, we’ve fought hard but our battle will soon be over. We are now the rearguard, conserving whats left of our resources and holding on for as long as possible. Waiting to repel another attack, one we know we can’t really win but ever hopeful of reincarnation.
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TDDH, you know you can claim your mileage back from HMRC?
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