Johnston Press under mounting pressure as activist investor calls for meeting
An activist investor is meeting with Johnston Press’ chairman Ian Russell tomorrow (13 September) to discuss whether the struggling publisher should be pushed to change.
The investor fund, Crystal Amber, has a 3.3 per cent stake in the publisher. The value of its investment has slid as the company’s shares have fallen over the last 12 months.
Crystal Amber will reportedly wait until after the meeting before deciding whether it will start to agitate for change at the publisher, the Telegraph reports.
In August following the publisher’s half-year results, 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 Ashley 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.
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 to Tindle Newspapers for £4.25m.
Now the chief executive is under mounting pressure from its unsatisfied investors, with increased debt and decreased valuation clear warning signs to investors that the business is in trouble.
It is not yet known what Crystal Amber's ambitions for the publisher are, and whether this could include a push for sale.
Crystal Amber has a reputation for activist campaigns. It previously pushed Thorntons to put itself up for sale, resulting in the company being bought by Ferrero last year. It was also behind the sale of Pinewood studios, which agreed a £323m deal with a property investor in July.