Johnston Press plc
Address:
53 Manor Place
Edinburgh EH3 7EG
United Kingdom
Telephone: (+44) 131 225-3361
Fax: (+44) 131 225-4580
http://www.johnstonpress.co.uk
Statistics:
Public Company
Incorporated: 1767 as F Johnston & Co.
Employees: 4,100
Sales: £242.56 million ($363.8 million) (1999)
Stock Exchanges: London
Ticker Symbol: JPR.L
NAIC: 51111 Newspaper Publishing
Company Perspectives:
Johnston Press Plc is a major publisher of quality local newspapers, basing its publishing philosophy on local service to local communities. Johnston newspapers are local quality newspapers produced by local teams of people who have a dedicated commitment to producing local newspapers that both inform and reflect the important issues of the communities they serve, thus encouraging a loyal, committed and valuable readership.
Company History:
Edinburgh, Scotland's Johnston Press plc has pressed itself into the ranks of the United Kingdom's top five regional newspaper publishing groups. Johnston Press, which holds more than 200 local newspaper titles, including daily, weekly, evening, and monthly titles and both paid and free titles, has helped lead the ongoing consolidation of the United Kingdom's regional newspaper market. Since its acquisition of the regional newspaper division of EMAP, Johnston Press also has snapped up rival Portsmouth & Sunderland, as well as a host of smaller publishers and individual titles. Nevertheless, Johnston Press was disappointed in early 2000 after losing out in a bidding war (to the United States' Gannett) for the 120-title News Communications & Media plc (Newscom). In addition to its print titles, some of which are 200 years old and more, Johnston Press also has been actively building an Internet publishing presence, with more than 50 web sites in operation in 2000 offering access to the company's local newspaper content, as well as services such as online auctions and free internet access. Johnston Press, which shed such peripheral businesses as stationery, toy distribution, and bookbinding in the late 1990s, continues to operate a printing division for its own titles as well as third-party customers, with presses in Burgess Hill, Northampton, and Peterborough. In 2000, the company committed £15 million for the upgrading of its printing capacity. Nonetheless, newspapers remain the company's bread and butter, and Johnston has stated its interest in further acquisitions as the consolidation of the United Kingdom's regional newspaper industry appeared far from over. The company, having been led by a member of the Johnston family (which still owns 28 percent of the company), would have its first nonfamily-member chairman after Fred Johnston, architect of the company's major growth, stepped down from the chairmanship in 2000 (he remains a non-executive director of the company). Roger Parry was named new company chairman, joining CEO Tim Bowdler.
18th-Century Origins
One of the oldest continuously operating publishing companies in the United Kingdom, Johnston Press origins were in Glasgow in the mid-1700s, when Patrick Mair founded a printing company. In 1767, Mair moved his company to the nearby town of Falkirk, then a growing industrial center between Glasgow and Edinburgh. Mair transferred ownership of the company to son-in-law and head printer Thomas Johnston, and the company became known as F Johnston & Co., a name it was to keep for more than 220 years.
The Johnston company specialized in book printing and publishing, for both religious and secular works. Johnston's interest in newspaper publishing took root toward the middle of the 19th century. In 1846, the company bought the Falkirk Herald, the local monthly newspaper. Four years later the Falkirk Herald converted to a weekly publishing schedule.
For the next 100 years, Johnston's activities remained limited but profitable. By the end of the 1950s, the company's newspaper wing still held only four newspaper titles. The arrival of the latest generation of the Johnston family was to dramatically change the company's profile. Fred Johnston, great-great-great-grandson of Patrick Mair, joined the company in 1962 at the age of 27.
Under Fred Johnston, F Johnston & Co. began to build up its portfolio of titles, while remaining within its Scottish base. In the mid-1960s the company acquired a number of newspapers, all of which were local newspapers, such as the East Fife Mail and the Milngavie & Beasden Herald. The company continued its policy of pursuing individual newspaper purchases until well into the 1980s.
Meanwhile, the company also began to launch new titles, particularly free advertising-based newspapers, beginning with the Grangemouth Advertiser in 1976. The company's move to become a U.K. newspaper publisher came in 1978, when it acquired the Derbyshire Times, through its acquisition of publishing company Wilfred Edmunds Ltd. That acquisition also brought the company a series of other local titles, concentrated on the North Midlands region of England. From this purchase, F Johnston slowly built a presence in England, while continuing to build up its portfolio of local Scottish newspapers.
Nonetheless, F Johnston, like the rest of the United Kingdom's local and regional newspaper publishing industry, remained hamstrung by legislation enacted in the early 1960s designed to prevent the formation of local newspaper monopolies--especially given the popularity of the 1,200-title local newspaper market among the United Kingdom's reading public. That same legislation, however, restricted the growth of publishing companies, making investment in new equipment and technology difficult, if not financially impossible. Even into the end of the 1990s, Johnston CEO Tim Bowdler complained, 'In an era when AOL and Time Warner can merge, Johnston still had to get clearance to buy the 7000-circulation Arbroath Herald.'
By the early 1980s, however, new legislation promised a relaxation of newspaper acquisition procedures. The new rules affected primarily the national newspaper market; the effects were immediate, leading to massive investments in new technology and equipment, which ultimately resulted in higher print quality publications. The local and regional markets, however, remained under tight Mergers and Monopolies Commission scrutiny until well into the mid-1990s.
Johnston remained a small company through the 1980s, with its private status, coupled with government restrictions, making it difficult for the company to raise the capital to pursue further acquisitions. To rectify this position, Fred Johnston brought the company public in 1988, with a listing on the London Stock Exchange. The Johnston family retained a large share of the company's stock, and even into the beginning of the 21st century, the Johnston family's share remained at 28 percent. At the time of the stock offering, the company changed its name to Johnston Press plc.
A Regional Publishing Powerhouse for the 21st Century
The public offering enabled the company to step up its expansion efforts. With acquisitions in the local newspaper market restricted by government policy, the company turned toward outside interests to build up its revenues. In 1990, Johnston bought up Dunn & Wilson, giving it a bookbinding subsidiary, and then Cedric Chivers, adding that company's booksellers business. In 1992, Johnston moved into still more remote waters, when it bought Shoesmith & Etheridge, adding that company's stationery and toy distribution activities. By 1993, these acquisitions, plus the company's continued purchases of single local titles, gave it annual revenues worth more than £86 million. By then, Johnston had built up a portfolio of 70 local newspaper titles, worth some 75 percent of its turnover.
The tide in the United Kingdom's regional and local newspaper industry began to turn toward the mid-1990s. To stimulate investment among the country's small local and regional publishers--many of which were struggling to stay afloat financially--the government indicated its willingness to relax its acquisitions procedures. Johnston Press was among the first to take advantage of the new openness in the market, making its first multititle purchase in 1994, when it paid £29.4 million for the Halifax Courier newspaper group. The purchase gave Johnston not only the Halifax Courier, but eight other titles, including the three largest newspapers on the Isle of Man.
By the mid-1990s, however, a number of the industry's largest publishers, frustrated with their inability to make large increases in the regional and local newspaper holdings, began to sell out, sparking a wave of consolidation across the market. Among these publishers was EMAP, which in 1996 agreed to sell its 65 newspaper titles--including the 300-year-old Stamford Mercury&mdashø Johnston Press for £111 million. EMAP had originally been founded in 1887, by Sir Richard Winfrey, as the newspaper the Spalding Guardian. Winfrey's son Richard took over the company, which by then possessed four newspapers, in 1947, changing the name to East Midlands Allied Press. The company took the name EMAP in 1985. During the 1950s, EMAP had expanded from newspapers into magazines. In the late 1970s, the company met with great success with the launch of its Smash Hits music magazine, and continued its success into the 1980s with Just 17 and Empire. During the 1990s, EMAP was able to profit from its recession-troubled competitors, buying up a large number of magazine titles (including 14 from Canadian publisher Thomson) to boost its magazine division. By then, EMAP also had begun to explore an interest in other media, particularly radio, which it entered with the acquisitions of Trans World Communications and Metro Radio Group. EMAP's new focus led it to part with its newspaper division.
The EMAP acquisition bolted Johnston into the top five among the United Kingdom's local and regional publishers. By 1997, the company was ready to pursue more multititle acquisitions--reaching an agreement for £52 million to acquire the Home Counties Newspapers group. As Tim Bowdler told the Independent at the time of its initial agreement to buy Home Counties: 'This is a continuation of the consolidation of a very fragmented industry. We are looking for more acquisitions.'
The Home Counties deal fell through before the end of the year, in part because the extended review process of Mergers and Monopolies Commission approval allowed a rival to top Johnston's bid. Nonetheless, Johnston remained committed to
1767:F Johnston & Co. is established.
1846:Company acquires Falkirk Herald.
1850:Falkirk Herald is converted to weekly publishing schedule.
1962:Fred Johnston joins company.
1960s:Company acquires East Fife Mail and the Milngavie & Beasden Herald.
1978:Wilfred Edmunds Ltd. is acquired.
1988:Company goes public on London Stock Exchange.
1990:Dunn & Wilson and Cedric Chivers are acquired.
1996:Company acquires newspaper division of EMAP plc.
1997:Bookbinding and booksellers operations are divested.
1999:Company acquires Portsmouth & Sunderland, and sells stationery and toy distribution operations.
2000:Johnston acquires 14 newspaper titles from Southnews.
Refocused, Johnston Press began seeking its next big acquisition. In 1998, the company entered into talks with rival Portsmouth & Sunderland, for acquisition of that company's newspaper titles. Talks broke off soon afterward, and, in January 1999, Johnston Press attempted a hostile takeover bid of Portsmouth & Sunderland, building up a holding of nearly 15 percent. Finally, in March 1999, Portsmouth & Sunderland agreed to a renewed offer from Johnston, valued at more than £266 million. The addition of Portsmouth & Sunderland's titles boosted Johnston Press from 155 titles to more than 200, securing the company's number four position among the country's more than 120 local and regional publishers.
By the end of 1999, Johnston Press had expanded its annual sales to more than £240 million. In early 2000, the company's bid for the takeover of the 120-title Newscom was outgunned by Gannett, of the United States, which also had acquired the United Kingdom's Newsquest newspaper group. Instead, Johnston contented itself with the purchase of 14 newspapers, including the Lincoln Standard and Four Counties newspaper titles, from Southnews for £16.5 million.
In March of 2000, the 65-year-old Fred Johnston announced his decision to retire, relinquishing the chairmanship of the company to Roger Parry, marking the first time in the company's history when it had not been led by a member of the Johnston family. Fred Johnston nonetheless remained with the company in a non-executive director's capacity. In the meantime, Johnston Press had turned toward the booming Internet publishing market for future expansion. With more than 50 web sites--each tailored to specific local markets, but offering nationwide linkups--Johnston Press became one of the United Kingdom's most active Internet publishers. The company also became an Internet access provider, offering free Internet access through a number of its web sites. At the same time, Johnston Press remained committed to maintaining its leadership position in the regional and local newspaper market, which remained highly fragmented and ripe for continued consolidation into the new century.
Principal Operating Units: Banbury Guardian; Bucks Herald; Buxton Advertiser; Derbyshire Times; East Fife Mail; Falkirk, Grangemouth & Linlithgow Advertiser; Falkirk Herald; Fife Free Press; Halifax Evening Courier; Hemel Hempstead Gazette; Hucknall & Bulwell Dispatch; Kirkintilloch & Bishopbriggs Herald; Luton & Dunstable Herald & Post; Mansfield Chad; Milngavie & Beasden Herald; Northampton Chronicle & Echo; Peterborough Evening Telegraph; West Sussex County Times; Worksop Guardian; Worthing Herald.
Principal Competitors: Daily Mail and General Trust plc; Newsquest plc; Hollinger International Inc.; Scottish Media Group plc; Independent Newspapers; The Times Mirror Company; United News & Media plc; News Corporation Ltd.
Further Reading:
Daeschner, Jeff, 'Johnston Press Tops Profit Forecasts,' Reuters, March 30, 1999.
Larsen, Peter Thal, 'Johnston Moves in on Newspaper Rival,' Independent, January 23, 1999, p. 19.
Murray-West, Rosie, 'Johnston Chairman Will Not Be One of the Family,' Daily Telegraph, March 22, 2000.
Wright, Melanie, 'Johnston Press Accused of `Smash and Grab' Tactics,' Daily Telegraph, January 25, 1999.
Yates, Andrew, 'A Great Story in Local News,' Independent, April 2, 1998, p. 24.
------, 'Johnston Press Pulls Out of Newscom Battle,' Reuters, May 9, 2000.
Source: International Directory of Company Histories, Vol. 35. St. James Press, 2001.
