Fry to leave Johnston Press after first rise in profits since 2004

Fry, who took the helm in January 2009, signalled his intention to leave, to focus on "personal projects", as the Edinburgh-based group unveiled a 3.9 per cent rise in full-year underlying operating profit - the first such increase, excluding acquisitions, since 2004.

Johnston Press shares fell 19 per cent or 2.3p to close at 9.92p last night as chairman Ian Russell said there had been a weaker-than-expected start to 2011.

Total advertising revenues for the first nine weeks of the year fell by 11.4 per cent.

Russell said: "The pace and consistency of the economic recovery remains uncertain and this is reflected in a weaker start to 2011 than we had anticipated.

"Nevertheless, much of the group's work in 2010 was concentrated on improving systems and technology and making processes more efficient.

"Given the group's historic strengths and presence in the many communities it serves, our opportunity now is to be innovative in growing revenues both from traditional and new sources and capitalising on the economic recovery when it gathers pace."

Operating profit in the 52 weeks to 1 January rose to 72 million from 69.3m a year earlier while total operating costs were reduced by 30.1m during the period.

Pre-tax profits on an underlying basis fell 29.6 per cent last year to 30.5m. The pre-tax figure was hit by an increase in finance costs and a net impairment charge on intangibles of 13.1m.

The group, which publishes more than 270 titles including Scotland on Sunday, Edinburgh's Evening News and the Yorkshire Post, said print advertising continued to decline last year, by 7.1 per cent. This was at a slower rate to 2009 but public spending cuts had a particular impact on the final three months of the year, the publisher said.

The firm made further progress in digital advertising, with growth of 4 per cent on a like-for-like basis while like-for-like newspaper sales revenues were down 2.8 per cent.

Newspaper circulations declined by an average of 4.7 per cent for weekly titles and by 7.3 per cent for daily titles, the company said.

Despite a "significant" increase in finance costs last year, net debt was reduced by 35.4m to 386.7m.

The publisher's board said that its short-term priority "remains debt reduction".

No final dividend payment to shareholders was proposed.

Fry joined Johnston Press from Archant, the Norwich-based regional media group.

He said of his departure: "I would like to have more time to spend on personal projects and with my family, and the flexibility to introduce an element of plurality into my business life.

"The main message is that I'm still around. I will be continuing in my role for up to 12 months. The recruitment process has started now and there will be a further announcement in due course."Fry replaced Tim Bowdler, who departed in 2009, having spent 15 years with the company.