Johnston Press profit up 22.6% to £31.5m

Regional newspaper publisher Johnston Press, owner of The Scotsman and the Yorkshire Post, said on Tuesday its adjusted profit before tax rose 22.6% to £31.5 million in the 52 weeks to January 2.

The company’s share price rose about 14% after its results were announced.

Johnston Press also said its shareholders overwhelmingly approved its roughly £24 million acquisition of the cut-price i newspaper from Independent Print Ltd.

Ashley Highfield, Johnston Press chief executive, said the acquisition of the i newspaper was “incredibly exciting” for the firm.

“It gives us scale, with a combined JP plus i daily print circulation of over 600,000 papers making us the UK’s fourth largest news publisher, and thus numerous revenue and cost synergy opportunities,” said Highfield.

“Further, not only will the i contribute positively to earnings but it will allow us to accelerate growth in digital, and help stabilise our circulation revenues.

“In conjunction with the planned asset disposals this will enable us to continue to reduce debt levels and cut financing costs further.”

The company said its digital audiences and digital revenues showed growth over the year.

It said its digital audience grew by 40.7% year on year to 22.6 million unique users in December 2015 and its total monthly audience across print and online grew 19.8% to 31.9 million in December 2015.

Total digital revenues grew 12.4% to £30.6 million for the period, representing 20.6% of advertising revenues — with revenue “from the key strategic category of digital display advertising” up 26.7%.

Total revenues fell 6.8% to £242.3 million for the period.

Print publishing revenues — advertising and circulation — were down 9.7% to £193.9 million, including a fall of 11.9% in print advertising.

Earnings per share increased by 30.1% to 21.2p.

Johnston’s net debt was reduced to £179.4 million from £194.2 million the previous year.

The firm’s pension deficit was reduced by £63 million to £27 million.

CEO Highfield added: “The challenging trading conditions experienced in the second half of 2015 have continued into Q1 2016.

“We have reduced costs to maintain profitability, reset our portfolio and refocused on priority markets with attractive audiences that offer the best opportunity for growth.

“Success in driving our national display advertising business in 2015 and the rollout of our local display advertising Sales Force initiative gives me confidence for the future despite the fact that the market remains difficult.”

Johnston Press chairman Ian Russell said total advertising revenue — combined print and digital — was down 7.8% to £148.7 million in 2015.

He said print advertising was down 11.9% from £134.1 million to £118.1 million and newspaper sales revenue was down 7.0% from £77.8 million to £72.4 million. 

“The sector experienced tough trading conditions in the second half of 2015 and this has continued into the early part of 2016,” said Russell.

“Total revenues for the eight week period to 27 February 2016 were down 13% against strong year on year comparatives in the first quarter of 2015, which in line with the sector weakened substantially during the second half of 2015 …

“We remain focused on driving increased audiences and providing creative solutions for our advertisers. We will also continue to explore opportunities for the disposal of assets, with a view to deleveraging the balance sheet and further cutting financing costs.”

Russell added: “The industry faced continued downward pressure on its print advertising revenue.

“The relentless pace of change continues and we have worked hard to remain at the forefront of digital development in our markets.

“We have restructured our business, removing a layer of regional management, and reshaped how our regional newsrooms operate to prepare them for the future in which digital will be ever-more prominent.

“We will now do the same to our sales operations.

“Digital growth — audiences and revenue — remains key to our long-term future …

“2016 will see us focus on and invest in our primary brands, operating in growth markets with attractive audiences, with an emphasis being put on national and local display advertising.

“The review and refocus of our portfolio has led us to close or merge some titles and exit low marginal digital products.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.