Regional newspaper group Johnston Press has committed £40m to a new press centre in Shef?eld on the back of its interim pre-tax pro?ts announced last week.
Johnston will spend the £40m over the next three years on the print centre in Shef?eld after upgrading colour facilities in Leeds and Sunderland. And chief executive Tim Bowdler is ready to go back on the acquisition trail after buying up Regional Independent Media for £560m in spring last year.
Shares in the company rose after it revealed a 51 per cent rise in ?rst-half pre-tax pro?t at £66.7m – up from £44.3m during the same period last year. With net debt falling to £463m from a peak of £600m, Bowdler has indicated that Johnston, which already publishes 243 titles, would have the ?nancial and management ?repower to take part in further consolidation if the right deal came along.
He said: “If an opportunity arose in the near future we would certainly be an active player.” Bowdler has said that the group would “have a look at” the sale memorandum for Trinity Mirror’s £40mrated Irish titles, including the Derry Journal and The Newsletter, Belfast, but pointed out that there was no certainty that Johnston would be a bidder.
Media insiders speculate that Johnston may turn its attention to others including the North Wales Newspapers Group, an independently run family company based in Mold, Flintshire, which publishes the Evening Leader, Wrexham, and a group of weeklies.
Cumbrian Newspapers based in Carlisle and run by the Burgess family is seen as another potential target, although previous bids for the group have been resisted. Johnston Press is very pleased at the increase in operating margins at RIM, which it bought for £560m.
Since taking it over, it has boosted the operating margin from 26.8 per cent to 32.6 per cent – bringing it closer to the group margin of 33.8 per cent. Cost savings of £10m this year, achieved by measures including centralising back of?ce functions and reducing the headcount by 250, are ahead of expectations.
Johnston Press stock has outperformed the UK media sector by 19 per cent over the last year.
By Hamish Mackay