JOHNSTON Press chief executive Ashley Highfield today said the company had “turned the corner” after announcing its first increase in underlying operating profit for seven years.
Highfield said the figures showed a continuing rise in digital revenue and claimed the firm, which owns The Scotsman, Scotland on Sunday and the Edinburgh Evening News, was now in a “healthy condition”.
Negotiations on refinancing its debt are ongoing but Highfield disappointed the markets by giving no update. He told The Scotsman that he hoped to have an agreement with the banks and its advisers by the end of the year and continues to look at an issue of shares as an option.
“If we refinance by the end of the year we get a rebate on the interest rate. It would be worth £20 million off the debt,” he said. Net debt was down £17.3m to £302m.
“I think [these results] are pretty good news. Our return to operating profit growth means we have turned the corner.”
He said cost-cutting and “strong digital growth” was behind progress in transforming the company from traditional print into a multi-platform media company. Staff numbers fell 13 per cent to 4,188.
“We do not need to pedal as hard as we have to get this business back on a stable footing. We will not need to take anything like these numbers out in 2014. I would say the company is in a healthy condition and we will be significantly healthier once we have got through the refinancing.”
He noted that two divisions had reached the point where digital revenue was outweighing the decline of traditional income. He predicted a return to top line growth at group level over the next 12 to 18 months.
Underlying operating profit for the year rose 2.5 per cent from £53m to £54.3m, though exceptional items, such as the writedown in the value of assets and various restructuring costs, pushed the company into a loss before tax of £286.8m.
Underlying total revenue was £291.9m, down 5.5 per cent, although there was a 19.4 per cent rise in digital revenue in the year, and 25.3 per cent in the second half. Digital display advertising revenue grew 30.3 per cent for the year, and 44.6 per cent during the final six months.
In December, the group, whose titles also include the Falkirk Herald and the Yorkshire Post, achieved an aggregate audience of 21.1 million, an increase of 17.1 per cent year on year.
Highfield, pictured below, said there was no plan to introduce a paywall for the websites, though he was considering ways of tracking customers.
“I don’t think we are going to go there [a paywall] but maybe we should get people to register through logins. We would therefore get to know them better,” he said.
“The Times went behind a paywall and no-one reads it online anymore. It is a quick way of killing a newspaper.”