Johnston Press sticks with forecast

NEWSPAPER publisher Johnston Press, whose titles include The Scotsman, Scotland on Sunday and the Edinburgh Evening News, expects full-year results to be in line with expectations despite reporting a fall in income from advertising.

Total advertising revenues (print and digital) for the 18 weeks to 7 May were down 10.6 per cent, but the rate of decline had slowed in recent weeks, the group said yesterday. Within this overall figure, the first quarter was down by 11.6 per cent year-on-year while the first five weeks of Q2 showed a slower rate of decline of 7.8 per cent.

The company said cutbacks in public sector recruitment were largely behind a 30.7 per cent fall in employment advertising, the worst performing sector but the impact from cuts in public sector activity is expected to reduce throughout the year.

Display advertising continues to perform better with a year-on-year decline in the first quarter of 7.9 per cent improving to an increase of 5.5 per cent in the second three months. The start of the second quarter benefited partly by the move of Easter from March to April.

Because of the high proportion of employment advertising in the group's digital offering, internet revenues have been impacted by the tough employment conditions. However, the company said it was encouraged by the successful launch of an online business directory and customer review - "Find it" - at the start of March.

Rising newsprint prices have added to costs.

But the firm expects to partly offset this increase and other inflationary pressures through continued cost management as well as generating incremental year-on-year savings in the region of 5 million.

Net debt was 388.7m at the end of April and the company brought forward the 20m reduction of its facilities scheduled for June 2012 to 28 April. This should save the group around 500,000 in interest costs this year.