Advertising market improves but still weak, says Johnston

REGIONAL newspaper group Johnston Press today said advertising in the second half of its financial year to date had improved but was still down by 5.4% on a like-for-like basis.

In an interim management statement for the 44 weeks to November 6, said second half advertising was better than the first half decline of 6.3%. 

The Edinburgh-based group, which owns 40 titles in the North West including the Lancashire Evening Post, said property advertising continued to grow with other categories, excluding recruitment, either continuing to show reduced rates of decline or growing in some of its geographic divisions.

Johnston said the decline in print advertising revenues excluding recruitment in the second half to date was 2.5%, with the decline in recruitment advertising in the same period being 29.1%. 

The group said it had also been hit by the public sector squeeze.

It said: “In the last 18 weeks, public sector-sourced advertising has been particularly difficult and although it only made up approximately 9% of our total advertising in the third quarter, the declines have been sufficient to slow the overall rate of improvement in advertising performance. 

“Digital advertising growth has continued with our employment offering continuing to gain market share in the regions where we publish. Over 50% of our news websites have now been upgraded to the new platform which provides improved interactivity, enhanced content and will facilitate the roll out of our business directory offering, in partnership with Qype, in 2011.

The group continues to make year on year cost savings with total savings for the year now expected to be in excess of £20m.  Johnston is to close a printing operation in Limerick, Ireland, to save on costs.

Net debt was £388m at the end of October, a reduction of £13m in the second half to date.

“Despite the decline in total advertising revenues being slightly worse than previously anticipated, this has been largely offset by increased cost savings and therefore it is expected that the outcome for the year will be satisfactory,” Johnston Press added.