Highbury Sells Business Publishing Arm
Magazine publisher, Highbury House Communications has announced the proposed sale of its business publishing operations, BCom, to Ergo Science Corporation for gross profits of £12.5 million. This will put the Group on track to achieve its stated strategy of reducing indebtedness and focusing on its consumer newsstand business.
It is estimated that net proceeds will total around £10.5 million, which will be used by Highbury to reduce its bank debts.
Commenting on the deal, Mark Simpson, chief executive of Highbury said: “I am pleased that we are announcing today a significant step in the strategic restructuring of Highbury. The proposed disposal of Highbury’s business publishing operations will reduce our indebtedness and enable management to focus its attention on moving the core newsstand consumer business forward.”
Last year the publisher indicated that a number of the magazines in its portfolio would face closure or consolidation over the next 12 months, as the company attempts to cut costs and recoup some of the revenue which evaded it during 2004 (see Highbury To Close Titles As 2004 Proves Unsuccessful).
The company also released a less than optimistic trading statement for 2004 last month, with figures indicating that December trading for the Group’s UK Lifestyle division was patchy, with revenues for quarter four dropping by 7%, compared to 2003.
The trading statement revealed that total group revenues for 2004 were £115 million, with £70 million of that contributed by Highbury’s UK consumer newsstand business. Overall, as predicted in the Group’s December trading statement, the UK Consumer divisions saw revenue from newsstand magazines from Q4 2004, drop by 3% compared to 2003, of which circulation revenue was 2% lower and advertising declined by 7%.
Highbury also disclosed in its statement, that it had received an approach that could lead to a possible take over bid for the company. Industry speculation surrounding the possible take over bid has earmarked magazine publishers, such as Emap or PUC and smaller rivals such as Future Network (see Future Confirms Intention To Bid For Highbury).
However, the outlook for 2005 sees Highbury on a firmer footing, resulting from the changes made during 2004, with the company expecting to announce an updated profit estimate for the year ended 31 December 2004, which is due for imminent release.
Highbury House Communications: www.hhc.co.uk
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