Johnston Press adverts sales improve

Published on Wednesday 12 May 2010 21:01

JOHNSTON Press, publisher of The Scotsman and Scotland on Sunday, has reported a slowing rate of decline in advertising revenues, writes Scott Reid.

However, the group said the general election had subdued ad spending in April and forecast no significant improvement until the third quarter.

In a trading update yesterday, Edinburgh-based Johnston Press reported a 7.1 per cent decline in like-for-like advertising revenue in the 18 weeks to 8 May, after a 7.3 per cent decline in the first nine weeks.

"We would expect the election's impact to continue through the second quarter and therefore not see any significant improvements in the current trend until Q3 2010," the group noted.

It forecast cost savings of "at least" 15 million this year, up from previous guidance of 10m, while net debt has fallen by 3m to 419.1m since the start of the year. The firm said it should still meet current market expectations for 2010 thanks to cost management. Johnston shares have risen by about 36 per cent this year, outperforming a 3 per cent rise in the European media index. They closed down 2.5p at 27.75p last night.

Analysts at brokerage Numis said in a note: "We had been forecasting flat 2010 advertising … but believe it is prudent to trim this to about minus 2 per cent. However, the group will deliver 15m in cost savings in 2010, compared with previous guidance of 10m, which offsets the revenue shortfall."