The publishers of The Scotsman newspaper has seen its revenue, operating profit and profit before tax all fall compared to this time last year.
According to interim financial results issued today by Johnston Press – for the six months up to the end of June – revenue was down by 25 per cent, from £293.1 million last year to £218.6 million this year.
In a similar vein, operating profit was down more than half, from £81.6 million to £38.2 million, and so was profit before tax: also down by more than 50 per cent, from £62.5 million to £27.5 million.
But among the glimmers of hope, a dramatic decline in advertising – affecting all newspaper groups – appears to have substantially slowed. Also, Johnston Press’s debt had been reduced by £53 million since the turn of this year, to £424 million.
In a statement, chief executive, John Fry said: “The timing of the economic upturn remains uncertain but advertising revenues are demonstrating greater stability and we expect the cyclical improvement when it comes to more than compensate any ongoing structural change. We will maintain our focus on costs and look to secure additional operating efficiencies during the second half of the year.”
The Johnston portfolio of newspapers, plus numerous websites, includes the Yorkshire Post. Across the group, newspaper circulations were down 1.9 per cent on the same, six-month period last year.
Despite a 20 per cent increase in the price of newsprint, efficiency savings and reorganisation helped reduce costs by £31 million, to £180 million. A major factor was the making redundant the equivalent of 439 full-time members of staff at a cost of around £5.4 million in redundancy payments. The group now has an equivalent of 5969 full-time members of staff.
At the weekend, it was reported that three, named Scottish business people had begun negotiating with Johnston Press over the possible sale of The Scotsman (here), prompting subsequent denials (here). But the timing may have been designed to remind the publisher's bank that there are assets that could be sold to assuage today's interim results.
This may have been the reason for the following to comprise the second paragraph of Fry’s explanation of the results: “Negotiations with our lenders have been completed and have resulted in a new facility being agreed [lasting three years]. This facility provides a stable financial platform, allowing the group to actively manage through the current cycle.”
Johnston Press’s share price – as low as 5p in early March – has climbed to almost 35p.
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