The publisher of The Scotsman newspaper has reported a further decline in advertising revenue, but not as severe a decline as earlier this year.
In an interim management statement covering the 44 weeks up to four days ago, Johnston Press says that the last 18 weeks has seen advertising revenue down by 5.4 per cent, an improvement on the 6.3 per cent decline experienced during the first half of the year. But it is a mixed bag: property advertising is picking up, recruitment advertising not.
As the company continues to cut costs, it is also reducing its net debt: over the last few months, by £13 million – thus saving £1 million in interest – to £388 million.
It says, in a statement: “Property advertising continues to grow with other categories, excluding recruitment, either continuing to show reduced rates of decline or growing in some of our geographic divisions.
“The decline in print advertising revenues excluding recruitment in the second half to date is 2.5 per cent, with the decline in recruitment advertising in the same period being 29.1 per cent.
“In the last 18 weeks, public sector sourced advertising has been particularly difficult and although it only made up approximately nine per cent of our total advertising in the third quarter [of the year], the declines have been sufficient to slow the overall rate of improvement in advertising performance.
“Digital advertising growth has continued with our employment offering continuing to gain market share in the regions where we publish. Over 50 per cent of our news websites have now been upgraded to the new platform which provides improved interactivity, enhanced content and will facilitate the roll out of our business directory offering, in partnership with Qype, in 2011.”
The statement continues: “Despite higher newsprint prices in the second half, the group continues to make year on year cost savings with total savings for the year now expected to be in excess of £20 million. In order to further reduce our costs in the Republic of Ireland, where economic conditions remain very difficult, the printing operation in Limerick will be closed resulting in an exceptional cost in the region of £5 million, the majority of which relates to the write-down of the remaining asset value of the press.”
The statement concludes: “Despite the decline in total advertising revenues being slightly worse than previously anticipated, this has been largely offset by increased cost savings and therefore it is expected that the outcome for the year will be satisfactory.”