Advertising decline slows at Johnston titles

NEWSPAPER group Johnston Press today said that it is on course to deliver operating profits in line with market expectations this year as the rate of decline in its advertising revenues slowed to 22.1% in the second half of the year.

The Edinburgh-based group, which 40 titles in the North West including the Lancashire Evening Post, said in an interim management statement covering the 44 weeks to October 31 that it had seen “greater stability in advertising revenues” thanks to improvements in the property  market offsetting a “continued decline in recruitment related revenues”.

Johnston Press said that total advertising revenues were down 22.1% in the first 18 weeks of the second half, better than the 32.7% decline seen in the first half.

It said that advertising revenues were down by 19.1% in the last 10 weeks with average weekly revenues for September and October at the same level as May and June.

The group said that its cost-cutting measures would see a reduction in costs by around £50m for the year and it has closed two printing operations in Kilkenny, Ireland, and Edinburgh.

Johnston said that while it remains cash generative, there is “limited scope” for debt reduction in the second half of the year because it has had to pay £15m fees for its refinancing, increased interest on its debt and the cost of printing plant closures.

It added: “Given the greater stability in advertising revenues, combined with reducing declines in circulation revenues and continued progress with cost savings, the group is confident of delivering an operating profit in line with current market expectations for 2009.”