LONDON (Alliance News) - Johnston Press PLC Friday said it is proposing a 1-for-50 share consolidation to reduce the volatility of its share price, following its recently completed capital refinancing plan.
The publisher of regional newspapers including The Scotsman and The Yorkshire Post said that following the completion in June of its capital refinancing plan to pay down debt, it has a "very large" number of shares in issue and wants to reduce that number.
Johnston Press has over 5.29 billion shares in issue. The company proposes to consolidate every 50 of its existing ordinary shares into one new ordinary share, reducing the total to 105.9 million.
"As a consequence of having a very large number of existing ordinary shares, with a very low share price, small movements in the share price can result in large percentage movements and therefore considerable volatility," the company said in its statement Friday.
Johnston Press shares were down 2.8% Friday afternoon, trading at 3.80 pence.
"The share capital reorganisation will reduce the number of shares in issue and result in a share price that will be at a level that the directors believe is more appropriate for a business of the company's size in the UK market and should be more attractive to a greater number of potential investors," it said.
The share capital reorganisation is conditional upon the approval of shareholders, which it has set a meeting for next month.
The publisher, which owns over 200 newspaper titles in total, has been struggling in recent years as advertisers have reduced their spending on adverts in traditional newspapers. While a phenomenon that has affected the industry as a whole, local newspapers have been among the worst affected by these cuts. Like peers, Johnston Press is moving to a more digital strategy, but needed to sort out its debt-burdened balance sheet.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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