Newspaper group Johnston Press hit by sterling fall, but Brexit, Trump and fake news could be a boost in 2017
Newspaper group Johnston Press has a complicated relationship with Brexit.
The publisher of the i, Yorkshire Post and Scotsman today reported being hit by “Brexit-related uncertainty” in a trading update. In addition, the fall in the value of sterling that followed the vote has increased the cost of imported paper and ink, adding more pressure to the group.
But for Johnston Press chief executive Ashley Highfield, who is coming under pressure from activist investor Crystal Amber, there is a silver lining in Brexit. And in Donald Trump. And even in the perceived rise of “fake news”.
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“I see fake news and some of these issues about alternative realities and so on actually as quite positive for us – because we have brands you can trust,” he told CityAM
Asked what would be good news for Johnston Press in 2017, in addition to a sterling recovery, Highfield said: “I’m hoping that the news agenda continues to be as interesting as it is at the moment. Certainly, Brexit and Trump sell papers. And I can’t see that going away soon.”
He added: “We need to focus on what we do, which is create great content around news. In terms of that, I think 2017’s going to be an interesting and positive year.”
The figures
Including the i, which was acquired early last year, revenues were down six per cent as a whole over the year. This included a five per cent fall in the third quarter, after the Brexit vote, but a one per cent increase in the fourth quarter.
The figures paint a different picture when the i is taken out of the equation, with full year turnover down 14 per cent. The third quarter was down 16 per cent, meanwhile, and the fourth quarter down 11 per cent.
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To counteract the increased cost of importing paper and ink, and a six per cent fall in revenue during the year, Johnston Press has embarked on a “relentless cost-cutting programme [which] saved over £25m during 2016, and now totals some £100m since 2012, ensuring we maintained strong margins despite severe revenue pressures”.
Johnston Press shares, which have plummeted 60 per cent in the last year, were trading up more than four per cent at the time of writing to 16.42p.
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