Revenue slips at Johnston despite digital growth

REGIONAL newspaper publisher Johnston Press has seen first half sales and earnings dip.

The group, which is rebranding itself as a “community media group” with an emphasis on online content, saw revenue before non-recurring items slip 8% to £176.1m.

Pre-tax profits were down 1.4% to £13.6m.

Johnston’s portfolio includes the Lancashire Evening Post, Blackpool Gazette, Wigan Evening Post, and the Lancaster Guardian.

The group, led by Ashley Highfield, who previously worked at Microsoft and the BBC, is undergoing a major shake-up – merging editorships and turning five dailies into weeklies, including the Halifax Courier, Scarborough Evening News.

In today’s statement it said the first half was a period of “tremendous activity” in which it made “good progress”.

It continued with its cost-cutting drive, reducing overheads by £12.8m, with a full-year target of £25m. Some 23 titles were relaunched.

Johnston said it had seen a sharp increase in digital display and property revenues, up 43% and 25% respectively.

Total digital revenue grew to £10.3m but print is still the biggest earner, pulling in £97.4m.

The group is continuing to struggle with declining ad revenue and said it was down 14.7% in the first six weeks of the second half.

Mr Highfield said: “The first half has been a period of tremendous activity and we have made significant progress. Johnston Press is going through a strategic transformation. 

“As we continue to develop our digital portfolio, refresh our print offering, reduce costs, and use our substantial operating cash flow to bring down our debt, we are increasingly confident about the success of the strategy and the benefits that it will deliver.”

David Gorman, director at Manchester broker Milkstone, said: “Considering that nearly all newspaper groups are facing an uphill struggle at the moment, these aren’t bad figures from Johnston Press and are in line with our forecasts.

“Objectives for the second half will be more sensible housekeeping, such as debt reduction, whilst further developing digital and mobile services.”