Summary:

Former Daily Sport owners David Sullivan and Gold Group International have rescued the paper’s current proprietors with a £1.68 million loa…

imageFormer Daily Sport owners David Sullivan and Gold Group International have rescued the paper’s current proprietors with a £1.68 million loan.

Sport Media Group, which also operates lads mag Front plus the online, mobile and DVD adult business Netcollex it inherited in the £50 million 2007 reverse takeover by Interactive World, had breached a banking covenant in January, then put itself up for sale. But this morning the publisher said the cash injection has allowed it renew its banking facility for another 18 months.

In return for the loan, which comes at 6.5 percent annual interest, Sullivan gets a 9.99 percent share in the business (9.68 million shares priced at 3.5 pence each) and an “honourary publisher” role that will see him “assist with efforts to increase circulation and profitability”. But there is also a new “significant cost reduction plan across all areas of business”.

In earnings for the six months to January 31, also published today, Sport Media Group said operating profit slumped from to £600,000 from £3.3 million a year ago, on 19 percent worse income of £11.7 million. It has postponed its dividend payment. The group says the Sport paper has been loss-making since November – the cost reduction plan includes a re-negotiated print contract and job losses. The NetCollex online business “remains profitable, albeit at lower levels reflecting the lower circulation figures of the newspaper which is the primary marketing tool of NetCollex”.

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