TIDMJPR
RNS Number : 4339L
Johnston Press PLC
27 April 2015
Johnston Press plc
27 April 2015
ANNUAL REPORT 2014 AND NOTICE OF ANNUAL GENERAL MEETING
Johnston Press plc (the "Company") announces today that it has
published its 2014 Annual Report and Accounts (the "Annual Report")
together with its Notice of Annual General Meeting (which explains
the business to be conducted at the meeting), to be held at 12.00
noon at 8(th) Floor, Orchard Brae House, 30 Queensferry Road,
Edinburgh, EH4 2HS on 3 June 2015.
Copies of the above documents, along with the related proxy
forms for the 2015 Annual General Meeting, have been submitted to
the National Storage Mechanism and will shortly be available for
inspection at http://www.morningstar.co.uk/uk/NSM. Copies are also
available to view on the Company's website -
http://www.johnstonpress.co.uk. Hard copies have been mailed today
to those shareholders who have elected to continue to receive paper
communications.
Enquiries:
Peter McCall, Company Tel: +44 (0)131 311 7500
Secretary
Dan de Belder, Bell Pottinger Tel:+44 (0)20 3772 2561
Zoë Pocock, Bell Tel:+44 (0)20 3772 2574
Pottinger
APPENDIX
In compliance with DTR 6.3.5(2), the information contained in
this appendix is extracted from the Annual Report. Page numbers and
note references in the text refer to page numbers and notes in the
Annual Report. This material should be read in conjunction with,
and is not a substitute for reading, the Annual Report in full.
Principal Risks and Uncertainties
There are a number of potential risks and uncertainties which
have been identified by the Company that could have a material
impact on the Group's long-term performance.
The principal risks and uncertainties described are not a
complete list of all those risks identified but those that the
Directors feel could have a significant impact on the Group and the
general economic conditions in the markets in which we operate. By
including risks within this section, the Directors make no
prediction as to the particular likelihood of any event or set of
events occurring. The business could also be affected by other
risks not currently identified or considered to be significant.
Other risks that remain the most important in terms of the
overall performance of the Group, but also relate to issues over
which the Group has no control, namely:
-- Change in Gross Domestic Product;
-- Change in the unemployment rate;
-- Levels of property transactions;
-- Levels of new car sales;
-- Levels of consumer confidence; and
-- Public sector spending.
In 2013, covenant compliance and interest rate risks were
included as principal risks and uncertainties. Following the
successful refinancing of the Group in 2014, these risks are no
longer principal risks and uncertainties.
Description of
risk Impact Mitigation
--------------------------- --------------------------- -----------------------------
Further Reductions in Print Advertising
---------------------------------------------------------------------------------------
Print advertising Online migration The Group continues
revenues could of classified advertising to develop its online
decline at a faster means that even advertising offering
rate due to further with the economic through partnerships,
migration of customer recovery in the mobile apps and new
spending to online UK, it is unlikely verticals such as
media and weak that these revenues Digital Kitbag, The
consumer confidence will be fully recovered. Smartlist and WOW247.
in some of the Consumer confidence It also continues
markets in which remains low in to invest in its sales
we operate. some of the markets expertise to ensure
in which we operate, both a more proactive
and both national and effective approach
and local businesses and that the sales
spend on advertising offering is fully
may remain constrained. understood by sales
staff and appropriate
for customers' needs.
--------------------------- --------------------------- -----------------------------
Newsprint Price and Supply Risk
---------------------------------------------------------------------------------------
Although paper In 2014 newsprint The Group carefully
prices have fallen represented approximately manages its consumption
over the course 10% of the Group's of newsprint through
of the past 12 cost base. A significant waste management,
months future price increase in price recycling, pagination
rises represent would impact the and distribution
a risk to the Group Group's profitability of free titles. The
in terms of both and a reduction Group also has some
supply and pricing in supply could of the most efficient
of newsprint which, impact the quantity printing presses
after staff costs, of newspapers we in the industry.
is the largest distribute in the Contracts are put
single expense market, which could in place with key
incurred by the in turn have an suppliers to ensure
business. impact on advertising security of supply
revenues. and optimum pricing.
--------------------------- ----------------------------- ---------------------------
Failure to Monetise Increased Readership of our News Websites
---------------------------------------------------------------------------------------
This is an industry Readership continues Our digital strategy
issue. Online and to migrate to a focuses on building
mobile advertising digital environment digital audiences
rates are lower where the advertising and revenues through
than print and rates per reader new platforms and
it is difficult are significantly enhancing the content
to charge for accessing lower. This is available to readers
news online because in part driven and advertisers.
free alternatives by demographic There is considerable
exist. and societal change. effort to maximise
the advertising rates
attained for digital
inventory, and to
sell more inventory
at premium rates
eg through the launch
of 1XL.
--------------------------- ----------------------------- ---------------------------
Pension Deficit
Funding
--------------------------- ----------------------------- ---------------------------
The Group's defined While working to The Group entered
benefit pension reduce the pension into a revised arrangement
scheme is currently deficit, the Group with the scheme trustees
in deficit leaving must balance this during 2014 with
the Group responsible with the need to increased contribution
for potential shortfalls, invest in the business levels which are
in particular driven and reduce the designed to address
by sustained low level of debt and the deficit over
interest rates. resulting interest time. These were
charges. See Financial agreed with the trustees
Review for further concurrently with
information. the refinancing and
take account of Group
cashflow forecasts.
The scheme is closed
to future accrual
and pension exchange
exercises have taken
place to limit the
level of pension
increases, reducing
the liability further.
The Group is also
working with the
trustees and actual
advisors to manage
all controllable
items.
--------------------------- ----------------------------- ---------------------------
Business Opportunities Constrained by Debt
---------------------------------------------------------------------------------------
The Group continues The Group may be The refinancing completed
to operate with unable to take in 2014 provided
greater than optimal advantage of opportunities greater financial
levels of gearing, to invest in its stability for the
hence reduction core business or Group together with
of debt over time complementary revenue access to funding
remains a priority. streams thus impacting to permit a degree
However, this focus its long-term growth of investment in
could lead to missed prospects. its core business
revenue opportunities or complementary
if insufficient revenue streams.
funds are left
available for investment.
--------------------------- ----------------------------- ---------------------------
Business Change
--------------------------- ----------------------------- ---------------------------
The Group is implementing The implementation The Group has developed
two major projects of key change initiatives a planned phased
to revise the organisation could lead to disruption approach to implementing
of its news rooms in our business the changes including
and its sales model which could affect full communications
which may cause quality of output with staff and Unions.
disruption during and staff morale The business has
the transition. and industrial also updated its
relations and impact business continuity
advertising and plan to cater for
circulation revenue. the changes.
--------------------------- ----------------------------- ---------------------------
Adequacy of Human Resources
---------------------------------------------------------------------------------------
Like most organisations Should some of The Group has put
there is an element these key people in place succession
of dependency on leave the organisation planning across the
certain key individuals there could be organisation and
in the Group. the loss of industry this is reviewed
knowledge, supplier at least annually
relationships, by the Executive
technical expertise Directors and by
and leadership. the Board. During
2014 continued effort
was put into staff
engagement, including
staff surveys, improved
staff communication
and the on-going
awards scheme. These
initiatives will
continue in 2014.
--------------------------- ----------------------------- ---------------------------
Lifestyle and Technology Changes Affect Newspaper Circulations
---------------------------------------------------------------------------------------
Newspaper circulations The reduction in The Group continues
continue to decline circulations can to promote loyalty
due to increased lead to reduced schemes to encourage
availability of newspaper sales increased frequency
news through alternative revenues as well of newspaper purchase
media channels as reduced audience and is seeking to
and reductions for our advertisers. increase subscription
in the regularity rates. In response
of purchase. This to changing reader
change is in part habits we are in the
driven by demographic process of redesigning
and societal change. and relaunching our
news websites tailored
to mobile devices,
increasing the frequency
of updates and promoted
news and mobile services.
--------------------------- --------------------------- -----------------------------
Slowdown in Rate of Digital Growth and Reduction in Advertising Rates for Mobile
---------------------------------------------------------------------------------------
The Group has experienced A slowdown in digital The Group continues
strong growth in revenue growth to invest in improving
its digital income and/or reduction its understanding
streams in recent in advertising of its audience and
years. The rate rates achieved in growing its overall
of growth could could impact profitability audience, as well
slow if customers and the carry value as developing new
seek alternative of assets. In addition, products (e.g. Digital
routes to audiences the Group adopts Kitbag) to enable
served. The industry a long-term growth customers to reach
as a whole has rate of 1% in assessing their targeted audience
seen a shift towards the valuation of and enable the Group
accessing digital publishing titles. to continue to participate
content through In order to achieve in growth in digital
mobile devices this growth rate advertising spend.
which generally continued levels
attract lower advertising of growth in digital
rates than the is required for
rates achieved the foreseeable
for desktop devices. future.
--------------------------- --------------------------- -----------------------------
Directors' Responsibility Statement
The Directors are responsible for preparing the Annual Report,
the Directors' Remuneration Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and Article 4 of the IAS
Regulation and have elected to prepare the parent company financial
statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable law). Under company law the Directors must not approve
the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and the
Company and of the profit or loss of the Group and the Company for
that period. In preparing these financial statements, the Directors
are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRSs as adopted by the European
Union and applicable United Kingdom Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the Group and parent company financial statements
respectively; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's and
the Group's transactions and disclose with reasonable accuracy at
any time the financial position of the Company and the Group and
enable them to ensure that the financial statements and the
Directors' Remuneration Report comply with the Companies Act 2006
and, as regards the Group financial statements, Article 4 of the
IAS Regulation. They are also responsible for safeguarding the
assets of the Company and the Group and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the financial and corporate governance information included on
the Company's website (www.johnstonpress.co.uk). Legislation in the
United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
In accordance with Section 418 of the Companies Act 2006, each
Director in office at the date the Directors' report is approved,
confirms that:
-- so far as the Director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and
-- he/she has taken all the steps that he/she ought to have
taken as a Director in order to make himself/herself aware of any
relevant audit information and to establish that the Company's
auditors are aware of that information.
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with
International Financial Reporting Standards as adopted by the EU,
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the company and the undertakings
included in the consolidation taken as a whole;
-- the strategic report includes a fair review of the
development and performance of the business and the position of the
company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face; and
-- the Annual Report and financial statements, taken as a whole,
are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's performance,
business model and strategy.
By order of the Board
Ashley Highfield David King
Chief Executive Officer Chief Financial Officer
25 March 2015 25 March 2015
32. Related Party Transactions
Associated parties
The Group undertook transactions, all of which were on an arms'
length basis, and had balances outstanding at the period end with
related parties as shown below.
Purchases Creditors Sales Debtors
-------------- ---------------------- --------------------- --------------------- ---------------------
Related 3 28 3 28 3 28 3 28
party January December January December January December January December
2015 2013 2015 2013 2015 2013 2015 2013
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ---------- ---------- --------- ---------- --------- ---------- --------- ----------
Classified
Periodicals
Ltd - 20 - 5 - - - -
-------------- ---------- ---------- --------- ---------- --------- ---------- --------- ----------
Classified Periodicals Ltd is an associated undertaking of
Johnston Press plc, which re-publishes in a separate publication
classified advertisements that appear in the Group's titles and
those of certain other publishers.
The amounts outstanding are unsecured and will be settled in
cash. No guarantees have been given or received. No provisions have
been made for doubtful debts in respect of the amounts owed by
related parties.
Transactions with Directors
There were no material transactions with Directors of the
Company during the year, except for those relating to remuneration
and shareholdings, disclosed in the Directors' Remuneration
Report.
For the purposes of IAS 24, Related Party Disclosures,
management below the level of the Company's Board are not regarded
as related parties.
The remuneration of the Directors at the year end, who are the
key management personnel of the Group, is set out in aggregate in
the audited part of the Directors' Remuneration Report on page
62.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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