Johnston Press chief executive Ashley Highfield has come under fire from the National Union of Journalists (NUJ) on his disinvestment strategy for the publisher after the valuation of its portfolio was slashed by almost half.
Yesterday (4 August) the company cut the valuation of its title and print assets by 45 per cent to £224m and increased its debt to £209m, up from £183m a year ago.
Johnson Press, which own 200-plus titles in the UK, said its adjusted pre-tax profit for the six months to 2 July was £12.3m, a fall of 27 per cent on the same period last year.
Following the news, its share price fell to an all-time low, down almost 16 per cent since trading opened.
Under Highfield’s leadership Johnston Press acquired the i newspaper from the Independent in February for £24.4m. At the time the chief executive said the publisher bought the i newspaper to get scale and attract greater advertising budgets.
He claims the acquisition of the i newspaper has been "transformational for Johnston Press" and its circulation had increased considerably.
The i newspaper posted an increase in sales by seven per cent in April to almost 300,000, a rise of almost 20,000 copies a day, following its re-release under Johnston Press ownership.
However, the acquisition of i has forced the publisher to cut costs elsewhere in the company. Highfield is leading "disinvestment plans" for the company, starting with the sale of its titles in the Isle of Man.
In March the publisher announced it would sell, close or cut costs at a number of its local newspapers, with 59 of its daily and weekly newspaper titles identified as “sub-core.”
He said: "The market continues to be challenging and uncertainty surrounding the outcome of the Brexit negotiations has caused further softness in some segments of the advertising market, in June and July."
At the company's AGM in May, the union raised concerns about work-related stress and staffing levels; fewer than 1,000 editorial staff produce more than 450 publications and websites and the company cost-cutting plans continue.
Talks are currently being held between the company’s staff and NUJ officials over the staffing levels, working practices, use of freelance cover, recruitment policy and the state of the industry. Members of the NUJ have voted for industrial action.
Laura Davison, NUJ national organiser, said: "Sadly Ashley Highfield is living in cloud cuckoo land if he thinks the acquisition of the i is transformational. Taking on extra debt and flogging off other assets will not result in salvation for Johnston Press.
"Our members see the actual reality in the company's newsrooms day in and day out. Content sharing between the i and other titles is a way of trying to mask low staffing levels in Johnston Press sites with all the consequent problems for quality journalism and stressed-out staff. The company now appears to actually be factoring in periods of ‘disruption’ during its transformational projects – such as the salesforce changes.
"Unfortunately, as those who have gone through the transformational ‘Newsroom of the Future’ editorial programme will testify, things are certainly no better on the other side. There must be questions in the minds of the board and shareholders about whether this is the right strategy for the company, though Ashley Highfield seems intent on pressing on despite all the warning lights flashing on the dashboard."
The Drum has reached to out Johnston Press for comment on the NUJ's statement. They had not responded by time of publishing.