Profits dive at Johnston Press

REGIONAL newspaper publisher Johnston Press, which owns 40 titles in the North West including the Lancashire Evening Post, today reported profits down by almost 30% following a “painful” year for shareholders.

The group blamed steep falls in advertising revenues as well as the economic downturn and its high levels of debt, generated following an earlier acquisition spree, for its position.

It is a turbulent time for the regional Press, underlined by yesterday’s announcement from the Manchester Evening News publisher MEN Media – part of the Guardian Media Group – that it is axing 150 staff, including 78 journalists at 23 titles. Some 39 jobs will go at the Manchester Evening News.

Johnston’s chairman Roger Parry said that a reliance on print products alone was no longer sufficient as consumers’ needs change and “that a multi-platform approach which embraces digital channels is central to a successful long term strategy”.

The group cut its staff by more than 1,000 over the year to December 31 to 6,408 in a bid to reduce costs, while advertising revenues fell by 16.8% in the UK and 22.6% in Ireland and by £75.2m overall. Digital revenues increased from £15.1m to £19.8m.

In addition to the Lancashire Evening Post Johnston owns a raft of titles in the region including the Lancaster Guardian, the Blackpool Gazette and the Burnley Express. The group’s flagship titles are the Scotsman and the Yorkshire Post.

Editorial staff at Yorkshire Post Newspapers, which includes the Yorkshire Post and Yorkshire Evening Post, are currently on strike over planned redundancies.

Profit before tax and non-recurring items was down 28.1% to £98.8m on revenues down 12.4% to £531.9m. After all non-recurring items the group made a loss of £429.3m and its year end net debt was £476.8m.

Given the board’s priority on reducing its debt, Johnston said it would not be paying a final dividend. Chief executive John Fry said: “We need to plan for the turn of the cycle, which will undoubtedly happen.

“Advertising markets remain very depressed with advertising revenues to date in 2009 35.9% below those for 2008. However, we are benefiting from the full effects of the 2008 cost reduction programme with more initiatives in place which will drive further efficiencies.

“In the short term there is little prospect of a turn in the advertising cycle and our expectation is for 2009 to be a very challenging year with revenues significantly below 2008 levels and only partially offset by lower costs.”