Each decision was reached following engagement with relevant stakeholders and a full evaluation of the long- term implications. The directors were briefed through the production of detailed board papers which were distributed well in advance of Board Meetings.

Staff Redundancies

Turnover has continued to decrease in 2019 as advertising and circulation revenues have come under increasing pressure. Consequently, cost management has to always be a priority consideration for the directors. The largest ongoing cost within the business is the remuneration of employees and unfortunately 27 members of the team were made redundant in 2019. A number of these employees requested to leave voluntarily but regrettably others were compulsory. The changes were made over the course of the year, meaning a collective consultation was not required.

The directors acknowledged the distress such decisions have on loyal employees and sought to ensure a consistent and fair process was adopted. In all cases, there had to be a justification to deem a position redundant. Where compulsory redundancies were required, face to face consultations involving affected staff, senior departmental management and representatives from HR took place. The clearly defined process for decision making, and timescales for communication, was used consistently across the business.

These difficult decisions have been made to ensure the business remains sustainable and thus enabling the business to continue to employ hundreds of employees.

Newsprint

A decision which arose during 2019, was the opportunity to change the buying strategy for newsprint, the business’ largest consumable cost. The company has held longstanding direct relationships with four newsprint suppliers, but reduced consumption volumes, coupled with publisher consolidation elsewhere in the industry, had adversely impacted the company’s negotiating strength. Therefore, the company sought to leverage the greater purchasing power of a third-party provider in order to achieve a reduced price per tonne.

A key condition to the agreement was that deliveries were retained from our existing suppliers. The directors felt it was both fair and important to maintain agreeable operating relationships with these suppliers. Continuity of service was equally important for ensuring there was no degradation in the quality of our newspapers for our loyal readers and advertisers.

A small project team, made up of those employees who manage newsprint stock on a daily basis, were involved in the evaluation of the operational elements of the agreement. This project team confirmed that the revised ordering process would only differ slightly from existing practices and that there was no change to deliveries.

The financial business case outlined that a number of newsprint providers had been engaged in the procurement process and the rationale for the chosen supplier. Although the preferred procurement solution would deliver an adverse cashflow impact initially due to prepayments, that this would be negated within four months. The initial prepayment was funded out of working capital and the savings associated with the reduced costs provided shareholders with the best value return.