Heavy staff cuts allow Johnston Press to maintain profits despite fall in revenues

DEEP cost-cutting at the troubled newspaper publisher Johnston Press helped it maintain profits despite a dip in digital revenues as Google and Facebook tightened their grip on the online advertising market.

The publisher of the i, The Scotsman and scores of local titles is in a race against time to agree debt restructuring with its lenders before a repayment deadline next summer that threatens to tip it into administration.

First-half turnover was down 10pc on last year to £93m, as among the main lines of business only the i registered growth.

Overall advertising sales were down 18pc to £52.7m, including a 29pc plunge in classifieds. Property, usedcar and job advertising, formerly a gold mine for local newspaper publishers, accounts for little more than an eighth of Johnston Press revenues. The spending has shifted online where it is captured by specialist portals such as Rightmove, Auto Trader and Monster.

Even excluding classifieds, digital advertising was down for the first time in years. Sales were 3.1pc lower than last year at £9.7m.

David King, the chief executive, said the publisher’s debt problems had restricted its ability to invest in its websites to counteract Google and Facebook’s dominance.

The company reported a 50pc increase in first-half operating profits to £7.4m. On the adjusted basis preferred by management the figure was up 2.4pc at £16.6m.

Circulation revenues, down 1.9pc, were more resilient as cover price rises almost made up for declining readership. However, about 350 journalists and commercial staff were laid off last year.