Profits up at Johnston Press as digital sales grow

Johnston Press CEO Ashley Highfield. Picture: TSPL
Johnston Press CEO Ashley Highfield. Picture: TSPL
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NEWSPAPER publisher Johnston Press, which owns titles including The Scotsman, saw underlying pre-tax profits more than double in the first half of the year as it benefited from lower financing costs.

The Edinburgh-based group also saw strong growth in digital audiences for its titles, up by over 20 per cent to an average monthly figure of 19.9 million.

Digital revenues grew by 17.5 per cent to £16.5m with mobile revenues almost doubling in the period from January to June.

Total underlying revenues for the 26 weeks to 4 July fell by 4.6 per cent to £128.9m, although the drop was offset by cost savings of £7.6m.

Underlying profit before tax increased 114.3 per cent to £17.8m from £8.3m.

Net debt reduced to £183.3m from £194.2m at the end of last year. The company’s debt figure has fallen from about £300m at the start of 2014 due to a refinancing which also saw the interest rate paid fall from 11.7 per cent to 8.625 per cent.

Chief executive Ashley Highfield said trading conditions in the first half of 2015 had “undoubtedly been challenging”, with May and June being particularly difficult.

“However, we believe, local publishing, with small and medium-sized enterprises (SMEs) representing 80 per cent of our advertising revenue, is not as volatile as national publishing.”

Highfield said the company had seen some improvement in reducing the decline in advertising revenues in July compared to the same period last year.

“We will continue to drive for further improvement in revenues, albeit off a lower base, and will also continue to target further cost savings.”

Highfield said the company’s strategy was now showing “real traction” with digital now accounting for over 20 per cent of advertising revenues, up from 13 per cent two years ago.

Analysts at Numis, which has a “hold” rating on the shares, said the results were broadly as expected. “The group remains confident in its strategy and that transformation projects will position it well for the future,” the broker said.