A Lehman brother’s note on Johnston Press finds its way to my inbox following their (ie JP’s) rather scary results announcement yesterday.
Tucked away in the numbers is precisely the sort of financial recalibration that I’ve been talking about recently that happens with companies facing genuine disruption.
The column on the left is 2006, and on the right it is a forecast for 2010. So what’s happening – a drop in EBITDA margin from 34% to 23%. A drop in Return on Invested Capital from 9.2 to 4.4 and a drop in Return on Equity from 20.1 to 6.6 – all within four years.
Let’s be clear – the business at the end is still a good business, and 23% margins are more than respectable, but from a purely financial view, it is very, very different to the business at the start of the process. At its most naked, numerical level, this is disruption in action.
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Filed under: Media | Tagged: Johnston Press, newspapers
