Savings offset fall in ad revenue says JP

Newspaper publisher Johnston Press, owner of The Scotsman, expects a satisfactory outcome to the year as cost savings offset weak advertising held back by falling recruitment and public sector cuts.

The group said total advertising in the second half of the year to date on a like-for-like basis was down by 5.4 per cent, compared with a 6.3 per cent drop in the first half.

However, the Edinburgh-based company said its slow recovery had been hampered by particularly weak recruitment bookings and a fall in public-sector sourced advertising due to a cut in spending from the government.

The decline in print advertising revenues excluding recruitment in the second half to date was 2.5 per cent, with a 29.1 per cent decline in recruitment advertising.

The regional newspaper industry has been hit hard by a severe downturn in classified advertising but it is slowly starting to recover and Johnston had said in August that it hoped to see growth in its advertising market sometime this year.

Total cost savings for the year are expected to be more than 20 million and net debt fell 13m to 388m at the end of October.

Analysts at Numis said they rated Johnston Press shares a "buy", adding that the "risk/reward" was "attractive".