Johnston Press suffers 28% fall in pre-tax profits

Regional newspaper publisher Johnston Press suffered a 28% drop in adjusted pre-tax profits last year, with ad revenue down 36% at the start of 2009.

Adjusted pre-tax profits fell from £137.4 million in 2007 to £98.8 million in 2008.

The group’s adjusted pre-tax profits do not include non-recurring items such as a non-cash impairment charge of £417.5 million taken against publishing titles and goodwill.

It reported a pre-tax loss of £429.3 million for 2008 including all non-recurring items, down from £124.7 million in 2007.

Revenues for the year were down 12.4% during the year to £531.9 million, with ad revenues down 16.8% year on year in the UK and 22.6% in the Republic of Ireland.

The publisher of The Scotsman and the Yorkshire Post predicted that 2009 would be a challenging year with revenues falling further, although it said it hoped to offset this with more debt reductions.

The group cut costs by £32.3 million in 2008 to partially offset the decline in ad revenue. The board has also recommended no final dividend payment, instead using the available cash to reduce debt.

John Fry, chief executive of Johnston Press, said: “Advertising markets remain very depressed with advertising revenues to date in 2009 35.9% below those for 2008.

“However, we are benefiting from the full effects of the 2008 cost reduction programme with more initiatives in place which will drive further efficiencies. Costs for the first two months of 2009 are running 15.7% down on the same period in 2008.

“In the short term there is little prospect of a turn in the advertising cycle and our expectation is for 2009 to be a very challenging year with revenues significantly below 2008 levels and only partially offset by lower costs.”

The economic downturn has hit regional publishers hard, with up to 300 jobs likely to go at MEN Media and Observer Standard Media Group (see Regional publishers to cut up to 300 jobs).