Profit woe for newspaper group Johnston Press

REGIONAL newspaper publisher Johnston Press, the owner of the Lancashire Evening Post and Blackpool Gazette, today reported half year profits down by almost 50% as advertising revenues continue to decrease.

Chief executive John Fry admitted the group was cautious about the outlook for ad revenues in the second half of its financial year, with a 8.1% already in the first seven weeks.

For the 26 weeks to July 2, Johnston Press reported total revenue down 7.5% to £191.8m.

Operating profit before non-recurring items was £33.3m, compared to £40.5m over the same period last year. Profit before tax was down by 47.4% to £13.8m.

Total advertising revenues slid by 10% year-on-year, with employment revenues continuing to contribute most to the decline in print and digital, but offset by growth in national display advertising. Digital revenues dropped by 5%.

Johnston Press reduced its debt by £16m to £370.7m.

Mr Fry, who is standing down from the group, said Johnston Press had achieved an operating profit through a tight control of costs, including cost reductions of £8.3m resulting from new processes and an increased centralisation of back office functions. 

He said: “We remain cautious about the advertising outlook for the second half of the year, with total advertising revenues in the first seven weeks down 8.1%. 

“Digital revenues, which returned to year-on-year growth in May, have continued to grow in the second half with the first seven weeks up 6.8% compared to the same period in 2010. 

“We are also delighted to be able to announce the new digital partnerships with Zoopla and Nimble which will enable a significant enhancement of our property website and the launch of a new online vouchers business in the autumn. 

“The board has confidence that, in the absence of a further significant deterioration in the UK economy, the outcome for the group in 2011 will be broadly in line with current expectations.”