A cautious outlook on the advertising market has been posted by the chief executive of Johnston Press – publisher of The Scotsman and various Scottish local newspapers, among others.
Commenting on the company's interim financial results, for the 26 weeks up to the second of last month, John Fry, said: “We remain cautious about the advertising outlook for the second half of the year, with total advertising revenues in the first seven weeks [from July 2 onwards] down 8.1 per cent.”
Compared to this time last year, revenue at the group was down 7.5 per cent, from £207.3 million to £191.8 million.
In a similar vein, year-on-year advertising revenue was down ten per cent.
While circulation was little down, just 1.8 per cent, operating profit before non-recurring items was down 17.6 per cent, from £40.5 million to £33.3 million.
And profit before tax was down 47.4 per cent, from £26.1 million to £13.8 million.
But the company's bet debt was down too: by £16 million since the start of the year to £370.7 million.
In a company statement, Fry – who is leaving in March – says: “The group achieved an operating profit before non-recurring items of £33.3 million despite the challenging UK economic environment of the first half of 2011, down 17.6 per cent on the first half of 2010.
“This was achieved by tight operational control, with further cost reductions of £8.3 million resulting from new processes and an increased centralisation of back office functions. Operating cash flow within the group remains strong, with a further debt reduction of £16 million achieved in the first half of 2011.
“We remain cautious about the advertising outlook for the second half of the year, with total advertising revenues in the first seven weeks down 8.1 per cent. Digital revenues, which returned to year-on-year growth in May, have continued to grow in the second half with the first seven weeks up 6.8 per cent compared to the same period in 2010.
“We are also delighted to be able to announce the new digital partnerships with Zoopla and Nimble which will enable a significant enhancement of our property website and the launch of a new online vouchers business in the autumn. The board has confidence that, in the absence of a further significant deterioration in the UK economy, the outcome for the group in 2011 will be broadly in line with current expectations.”
At close of play yesterday, shares in Johnston Press were trading at 5p, valuing the company at £33.27 million.