Highbury down in the dumps

A THREE-year spending spree by Front to Fast Car publisher Highbury House Communications has left it reeling under too much debt, new chief executive Mark Simpson admitted today as he warned pre-tax profits will be less than £7m this year.

The shares, which were 28p less than 12 months ago, fell a further 2 1/4p to 8 3/4p on the news.

Simpson wants to sell chunks of the business and has persuaded the banks, which hold £59m of debt, to agree new terms so that it does not breach loan covenants.

Debt has jumped from £30.2m in the last 12 months.

The company also announced a 24% hike in first-half sales.

A strategic review will be completed by December but meanwhile jobs will go and the business division, which sprawls across the defence, travel, transport, food and drinks sectors, is on the auction block. There will be no dividend this year.

But the company said it has concluded that the strategy of focusing on consumer publishing, whilst seeking to reduce debt, is fundamentally sound.

'Now that our Highbury Business division has been reorganised and starting to deliver improved results we shall, in the second half of the year, commence the process of selling this business.'

Chairman Simon Neathercoat said: 'Highbury House has some short-term challenges which the new management team is vigorously tackling. This business has numerous strengths and opportunities with good titles, strong positions in attractive markets and good people but requires better organisation, stronger management controls and greater financial flexibility.'