John Fry, who took over at the helm of troubled Johnston Press yesterday, has his work cut out for him as the company, one of the worst-performers on the London stock market last year, faces up to the challenge of a possibly prolonged recession.
Mr Fry, who succeeds Tim Bowdler as chief executive of the regional media company, may need to focus first on conserving cash before he can even think of implementing a long-term growth strategy for the group.
Mr Fry, who joins from the Norwich-based regional newspaper company Archant, has worked at the information management company Dun & Bradstreet and at the business consultancy Bain & Company. Prior to that, he graduated from the prestigious French business school Insead as top student in his year.
He will need all his business acumen and intellect to turn around the fortunes of Johnston Press, which owns regional titles including The Yorkshire Post and The Scotsman. Media companies are suffering – in particular in the regional press – as businesses cut back on advertising to conserve cash.
Johnston's share price has collapsed since the middle of 2007, when it peaked at more than 350p. It closed yesterday at 12.5p, down 0.25p. In November the company reported a 15 per cent drop in advertising revenue, which normally makes up about three-quarters of its sales.
Paul Richards, an analyst at Numis Securities, said: "They have a lot of debt in a rapidly deteriorating environment; it's about how Johnston gets through the downturn, and Fry will have to first focus on just making it through the next couple of years." Analysts calculate that Johnston's debt is more than £400m, while its profit for 2008 is estimated at just over £100m.