Further fall in share prices prompts redundancy fears

The share prices of Britain’s biggest regional newspaper owners have plumbed new depths recently, signalling increased uncertainty for the industry

And there are growing fears of a wave of redundancies among the estimated 12,000 journalists who work for the UK’s weekly and regional daily newspapers.

Barry Fitzpatrick, National Union of Journalists organiser, said salami slicing of staff was already taking place.

‘There is evidence that Johnston Press is looking again to reduce staff – I had a call this morning from one Midlands title where they’re trying to make people redundant. At the moment about half my time is spent talking to individual journalists contacting me about their concerns about job insecurity and redundancy threats.

Tim Bowdler, chief executive of Johnston Press, decline to comment on speculation that jobs were being axed. Johnston, which owns The Scotsman and more than 300 local papers throughout the UK and in the republic of Ireland, has seen its share price tumble 25 per cent over the past month compounding a slide from above 300p a year ago to 50p at worst.

News that Ananda Krishnan, one of Malaysia’s richest men, has taken a 20 per cent stake in the company helped the shares perk up to 70p but they’re still down almost 80 per cent in 12 months.

A media analyst with Panmure Gordon, Alex de Groote, said there would be ‘lots more’job cuts. ‘There’s no question about it,’he said. ‘The economy is in a cyclical slowdown and the regional press is facing big structural issues.”

A policy of persistent shortsightedness by management is coming home to roost, he added. ‘This industry has had years to generate a meaningful internet revenue stream and it has failed totally.”

Newsquest, the UK’s second-largest regional newspaper chain, was blamed by US parent company Gannett for a slump in earnings as declining UK property advertising led the way downhill.

The share price of Trinity Mirror, which owns The Daily Mirror and regional titles including the Birmingham Post and Mail, Liverpool Echo and The Daily Record are off 24 per cent over the past month and down from well over £5 a year ago to below £2 this week. Cuts in marketing budgets have hit revenue and there have been big falls in adverts for houses and jobs.

Daily Mail & General Trust, owner of regional papers such as the Essex Chronicle and Hull Daily Mail as well as the Evening Standard hit a five-year share price low last week – down from £8 to 360p. The group said a 13 per cent slump in property advertising at its Northcliffe regional papers had caused a seven per cent slide in advertising.

Topics in this article : Johnston Press