Threat to Ireland's Local Press - Johnston's Press Broke ?

[cactusflower]

Over the boom years Johnstons Press (UK) moved in and spent crazy money acquiring Irish local newspapers. The books of the papers were at the time awash with money from property advertising.

This morning Johnston's share price fell by 30 pc as the group failed to sell the Irish papers.

Shares in Johnston Press slumped almost 30pc on Wednesday morning as the group issued a profits warning and said the failure to sell its Irish business meant there was a “strong likelihood” it would breach banking covenants.

Johnston Press, the publisher behind 300 publications in the UK, faces uncertainty if it does not secure new bank loans or sell its Irish newspapers at a good price.

The publisher said that advertising has plunged by 36% already this year, following on from a 16.8% fall in the UK and 22.6% in Ireland last year. Advertising accounts for a large proportion of its revenues.

Johnston bought Local Press Ltd and the Leinster Leader Group in 2005, for £65m and €139m, but was trying to sell them for €80m.

Despite "considerable interest" none of the bids for the business were deemed high enough. Johnston was hoping a deal would relieve some of its £448m debt burden and is now in "constructive" talks with its lenders.

Johnston Press shares slump as Irish sale ditched - Telegraph

Johnston Press to sell Irish newspaper titles - Businesses for Sale - Business Sale Report

The newspapers and printing companies are:

Dundalk Democrat
Leinster Leader
Leinster Express
Leitrim Observer
Longford Leader
Offaly Express
Kilkenny People Ltd
Kilkenny People
Limerick Leader Ltd
Limerick Leader
Nationalist Newspaper Co
The Nationalist and Munster Advertiser
Tipperary Star
Tallaght Publishing Ltd
The Echo

Johnston Press Ireland - Wikipedia, the free encyclopedia

Ireland has a strong tradition of local press and some of the papers are more than a 100 years in existence.

Hundreds of printing and newspaper jobs are at risk in Ireland and the UK.

[Risteard]

What about the Derry Journal? Is it not Johnston Press?

[jmcc]

Things like big companies going bust can be great for competition. If these large operations go to the wall, then there is a possibility of new publications arising to take their place. People will lose their jobs but new ones may be created. That's business.

Regards...jmcc

[Rebel CNC]

The papers themselves are probably sustainable albeit with much reduced advertising revenue. JP's problem is they bought them at an earnings multiple when estate agents, car dealerships, etc were falling over themselves to insert big glossy ads in the local rag.

I bet a few of the old owners will come back and pick up their title again for a fraction of the price they got from JP.

[adamirer]

The papers themselves are probably sustainable albeit with much reduced advertising revenue. JP's problem is they bought them at an earnings multiple when estate agents, car dealerships, etc were falling over themselves to insert big glossy ads in the local rag.

I bet a few of the old owners will come back and pick up their title again for a fraction of the price they got from JP.

Yup, they bought some pups at the prices they paid. So did the Indo, with the Sligo one they bought for €22m.

Regional press money is wayyyyyyyyy down, but is still profitable. The issue for companies in the field is that the profits are way below expectations for the silly money paid for them. The Indo is smashed anyway, and can't afford to even pick at the corpse.

[jmcc]

Have most of the Indo's "People" titles crashed and burned? The one for Waterford was particularly dire - it even followed the Sindo style of more pictures than content. It only lasted a few issues.

Regards...jmcc

[DerekOwens]

Yup, they bought some pups at the prices they paid. So did the Indo, with the Sligo one they bought for €22m.

Regional press money is wayyyyyyyyy down, but is still profitable. The issue for companies in the field is that the profits are way below expectations for the silly money paid for them. The Indo is smashed anyway, and can't afford to even pick at the corpse.

Exactly, it's the cost of servicing the debt from paying inflated prices that is rendering these outfits unprofitable. I'd expect to see a savvy vulture or two on the horizon. Speaking of which, is there any word on IN&M? Don't they have a very big bond rolling over tomorrow?!

[jmcc]

Speaking of which, is there any word on IN&M? Don't they have a very big bond rolling over tomorrow?!

Shoud be funny to see what happens there. It may be the end of O'Reilly's dominance in INM.

Regards...jmcc

[adamirer]

Shoud be funny to see what happens there. It may be the end of O'Reilly's dominance in INM.

Regards...jmcc

Actually... it won't be the end of anything. Bond is May 19th, expect an announcmeent very shortly on the solution.

[cactusflower]

Exactly, it's the cost of servicing the debt from paying inflated prices that is rendering these outfits unprofitable. I'd expect to see a savvy vulture or two on the horizon. Speaking of which, is there any word on IN&M? Don't they have a very big bond rolling over tomorrow?!

From the look of what happened, the vultures were around, but the price they were offering wasn't worth taking.