Johnston to pay 12m pounds for Beckett

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The Independent Online
JOHNSTON PRESS, the local newspaper group, is expanding operations with the purchase of a majority stake in Sussex-based TR Beckett for pounds 11.95m.

Fred Johnston, chairman, said there should be synergy with Johnston's neighbouring company, the West Sussex County Times. Advertising, marketing and printing operations could be combined, he said, without causing redundancies.

He denied that the price tag for the 92 per cent stake, valuing Beckett at about pounds 13m, seemed expensive when compared with its operating profit of pounds 780,000 last year.

He believed that TR Beckett's profit margin could be raised towards that of the West Sussex County Times, which at 18.3 per cent of turnover is almost exactly double Beckett's 9 per cent.

'There is a finite number of such good businesses, whose papers are established and market leaders, in the country and there is an even smaller number of businesses that fit in well to existing portfolios,' he said.

Johnston is issuing 3.58 million new ordinary shares at 310p each and 1.34 million loan notes to pay for Beckett.

Some 2.5 million new shares are being issued to raise pounds 7.75m cash. Existing shareholders can subscribe for a maximum of one share for every 10.79 held. The balance will be placed with institutional shareholders.

A further 1.08 million shares will be placed with existing Beckett shareholders, of whom Emap is the biggest, with a 37.1 per cent stake.

Extensive cost-cutting helped Johnston to lift pre-tax profits by 25 per cent to pounds 4.85m in the 26 weeks to 30 June compared with pounds 3.88m a year earlier.

Mr Johnston said the workforce had been reduced by about 10 per cent during the past 12 months through natural wastage. Turnover rose 8 per cent to pounds 33.73m from pounds 31.33m.

Earnings per share rose to 11.6p from 9.4p and the interim dividend has been raised from 2p to 2.25p.

Johnston shares rose 5p to 333p.