£30m cost cutting drives margins at Johnston Press

John Fry, chief executive of Johnston Press, said yesterday the Edinburgh-based publisher of The Scotsman had delivered a "considerable improvement in margin" last year after cutting costs by £30.1m.

Speaking at the firm's annual meeting, he said the company re-organised some of its divisions to make the savings, which allowed operating profit to rise for the first time since 2004.

The underlying figure was 72m in the 52 weeks to 1 January, from 69.3m a year earlier.

Fry told shareholders the company continued to see growth in revenues from advertising on its websites, helping to offset a fall in print advertising.

He said job adverts had been badly affected by the reduction in vacancies from the public sector, and online advertising was becoming an increasingly important source of income.

"Our new online jobsite has been doing really well in the market place," he said.

Fry said Johnston titles were the dominant source of news in the areas in which they operated, producing nearly ten times more stories that the BBC on a regional basis. He said: "We are unique in having news and information about local communities, and on the back of that we have got very strong local brands."

He also told shareholders that 2011 had seen a rise in the price of paper but the company would be able to mitigate the impact on its costs.

Chairman Ian Russell responded to a question from the National Union of Journalists about directors' remuneration by saying pay packages were linked "to a substantial extent" to the share price. About 8.6 per cent of shareholders voted against the remuneration report.

Shares in Johnston Press closed up 3.6 per cent at 8p.