Regional newspaper publisher Johnston Press yesterday reported better than expected year-end financial results and offered an optimistic outlook for the coming year (see City News). This goes against the current trend of profits warnings and an advertising downturn.
The
Times commended the management of Johnston for the ‘sensible and limited’ way in which it has approached the internet. Unlike other media groups, the company has developed 74 websites which run alongside newspaper its titles, rather than in addition to. Investment has accordingly been relatively small, but repaid. Johnston expects internet ventures to break even this year.
The Times adds that the company’s best efficiency gains will come through acquisitions – at a 10% national market share, there is still regulatory room for expansion. It is still looking to acquire a part of rival group Regional Independent Media (RIM) in a three way deal with Gannett and Guardian Media Group. RIM has so far resisted all offers.
Johnston’s shares are currently trading at 15 times earnings – a premium to rival regional publisher Trinity Mirror which is at around 11 times. The Times says that if it can maintain its 15% growth, the shares are a bargain. However, caution is required.
The Independent says that Johnston’s regional focus leaves it better placed than many other media groups to weather the knock-on effects of the US’ current downturn. It also sees benefits in acquisition, be it with RIM or another group. However, it believes that the share price as against earnings looks too expensive.
Times: Hold Independent: Shares look too expensive
