Johnston Press, the publishing group that owns The Scotsman, has posted a rise in operating profits and hailed a strong performance from the i newspaper, which it acquired in 2016.
Results for the 26 weeks to the end of June show that the group banked a statutory operating profit of £7.4 million, up from £4.9m in the same period a year earlier. Total revenue came in at £93m in the first half, down from £103.3m previously.
The firm, which also owns the Edinburgh Evening News, the Yorkshire Post and scores of local newspapers and websites, said digital audiences had grown to a record 27.3 million average unique users per month.
However, the effects of algorithm and news feed changes by internet giants Google and Facebook contributed to total digital advertising revenues dipping 4.3 per cent, excluding classifieds, to £12.2m.
A strong performance from the i newspaper, which notched up a 61 per cent increase in adjusted underlying earnings to £6m, helped to mitigate a broader decline in revenues.
Chief executive David King said the group’s strategic review into restructuring its historical debts, including its pension obligations, was ongoing. Adjusted net debt stood at £203.2m at the end of June, compared with £195.9m towards the close of 2017.
King said: “There are two sets of issues affecting Johnston Press. The first is the group’s historical debts, including its pension obligations, which continue to weigh on our balance sheet. The second is the tough market conditions affecting the performance of our newspapers and websites.
“However, our resilient performance allowed us to generate an operating profit of £7.4m in the period, up from £4.9m in H1 2017.
“The strong performance of the i demonstrates that it is possible to grow a newspaper brand, despite the prevailing headwinds.”
He added: “The market backdrop for regional/local newspapers is extremely difficult, as evidenced by the 15 per cent drop in our adjusted advertising revenues from H1 2017.
“We have continued to make progress growing digital audiences to a record 27.3m average unique users per month. However, the continued challenges posed by Google and Facebook, seen most recently through algorithm and news feed changes, has contributed to total digital revenue decline.”