A placing and open offer of 24 million shares at 25p is above yesterday's closing price of 23p, up 6p. However, there is a small turnover in Goodhead shares and it is thought that they could not be bought in the market for less than 25p. 3i, the investment group, has bought pounds 500,000 worth of shares and now has a 7 per cent stake.
The news was accompanied by publication of Goodhead's results showing a loss for the year of pounds 17m, against profits of pounds 335,000 last year. The figures, for the year to 31 May, were delayed pending arrangement of the fund-raising. The losses include a pounds 10m technical adjustment for goodwill, pounds 4m on the disposal or closure of subsidiaries, and pounds 2m of asset write-downs.
A restructuring of the company has included property disposals, sale of interests in Review Group Newspapers and Goodhead Direct, and closure of the the paper trading operation, Chaucer. Company Publicity is expected to be sold to its management for about pounds 518,000. But Goodhead has failed to sell its Canadian publishing business, and Mr Madejski said that it would be retained and expanded.
The group is left with two divisions, Goodhead Press and Goodhead Publishing. Mr Madejski, whose private company is Hurst Publishing, said that both operations were now trading profitably. Goodhead's net assets have fallen from pounds 14m to pounds 6.8m. The placing will help to restore assets and enable the group to reduce borrowings of about pounds 5.7m. 'It is the beginning of a new era for Goodhead,' Mr Madejski said.
Colin Rosser, the dismissed chief executive who owns 8.5 per cent of Goodhead, has issued a writ for breach of contract. The company refused to comment. Keith Barwell, the ex-Thomson Free Newspapers chief, has a 6 per cent stake and was expected to support the open offer for shares.