Johnston Press highlights signs of recovery in advertising market
JOHNSTON Press has flagged signs of a pick-up in regional print advertising as it reported a fall in annual losses.
The group, whose titles include The Scotsman and Yorkshire Post, lost £95 million before tax in 2017, compared with £300.7m in the preceding period.
Chief executive Ashley Highfield said Johnston Press had done well amid another tough year for the sector, highlighting a strong performance by the i newspaper the group acquired in 2016.
The company said the trading environment remains challenging, notwithstanding early signs of some improvement in the national print advertising market.
Mr Highfield noted advertisers started to increase spend in regional print in the first quarter of the current year, without quantifying the effect.
“This trend is driven by a somewhat stronger overall advertising market, our ability to precisely target audiences using ‘big data’, and improving sentiment towards quality print publishers in the wake of the Fake News and social media trust concerns,” said Mr Highfield.
Directors expect to see continued pressure on revenues, and the requirement for cost savings.
But Mr Highfield appears confident that Johnston Press is making good progress with a strategy that has involved developing digital revenue streams to offset pressure on print circulations and associated advertising.
Johnston Press saw off an attempt by activist investor Christen Ager-hanssen to topple its board and draft in former First Minister Alex Salmond as chairman before Christmas.
The group said yesterday it would continue to selectively invest in its business in 2018, with a focus on digital, journalists, and content generation.
Johnston Press has announced 63 hires in the current year, including 30 in digital. It employs 849 journalists.
However, Mr Highfield noted: “Whilst operationally the business is performing well in challenging markets, addressing the Group’s capital structure remains a key priority.”
Johnston Press had £195.9m adjusted net debt at the year end on December 30, compared with £204.5m at the end of the preceding period.
The London-listed group had a market capitalisation of around £9.5m based on yesterday’s closing price of 8.85p per share.
The group wants to refinance £220m bonds, which are due for repayment in 2019.
It launched a strategic review of financing options in March last year, which is yet to be concluded. Discussions with stakeholders are progressing, the group said.
An analyst at joint house broker Panmure, Jonathan Helliwell, said the outcome of the review would be key for Johnston’s share price.
Analysts at joint house broker Liberum reckoned a stellar performance from the i newspaper helped Johnston Press perform broadly in line with market expectations in the latest year. First quarter indications appear to be in line with market expectations.
Johnston Press bought the i for £24m in April 2016 from Evgeny Lebedev. It has increased the profitability of the title, helped by relaunching the Saturday edition, increasing cover prices and investing in online operations.
The group achieved £40.1m underlying profits in the 52 weeks to 30 December, against £43.9m last time.
The figures include the results of the i from April 2016. They exclude the results of the Isle of Man operations and Midlands and East Anglia titles sold in the last two years.
Circulation revenues rose to £79m from £76.9m.
Print advertising revenues fell to £48.8m from £52.6m.
Digital advertising rose to £20m from £17.7m.
Contract printing revenue rose to £13.3m from £12.8m.
Total costs fell by £12m annually.
The group cut £59.2m off the valuation of its titles last year and £336.85m in the preceding period.
Addressing the group’s capital structure remains a key priority