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Johnston Press reports year-on-year increase in operating profit Johnston Press reports year-on-year increase in operating profit
(about 5 hours later)
Johnston Press has reported its first year-on-year increase in operating profit in almost seven years in the 18 weeks to 4 May, despite a tough market which saw advertising revenues decline by more than 15%.Johnston Press has reported its first year-on-year increase in operating profit in almost seven years in the 18 weeks to 4 May, despite a tough market which saw advertising revenues decline by more than 15%.
The regional press publisher, which pushed through almost £40m in cost cuts and axed more than 1,300 jobs last year, said that the rate of decline in operating profits between 2006 and 2010 was about 20%.The regional press publisher, which pushed through almost £40m in cost cuts and axed more than 1,300 jobs last year, said that the rate of decline in operating profits between 2006 and 2010 was about 20%.
In 2011 the profits fall was 11%, and last year, the first full year under the leadership of chief executive Ashley Highfield, the decline in operating profits was 5%.In 2011 the profits fall was 11%, and last year, the first full year under the leadership of chief executive Ashley Highfield, the decline in operating profits was 5%.
Highfield would not break out the operating profit figure for the four-and-a-half month period to 4 May financial update reported on Monday, but said that a relaunch of 183 titles and focus on developing a digital strategy is paying dividends.Highfield would not break out the operating profit figure for the four-and-a-half month period to 4 May financial update reported on Monday, but said that a relaunch of 183 titles and focus on developing a digital strategy is paying dividends.
"For the first time in almost seven years, we are in a position to report a year-on-year increase in operating profit for the period," he said."For the first time in almost seven years, we are in a position to report a year-on-year increase in operating profit for the period," he said.
Highfield is looking to take out another £20m in costs this year, but said the impact would be much more "modest" than the deep cuts last year.Highfield is looking to take out another £20m in costs this year, but said the impact would be much more "modest" than the deep cuts last year.
Total revenues for the period fell 11.4%, with advertising revenues down 15.1%.Total revenues for the period fell 11.4%, with advertising revenues down 15.1%.
Highfield, the former Microsoft executive and BBC director of future media and technology, said the development of a digital strategy at Johnston Press was starting to bear fruit. Highfield, a former Microsoft executive and ex-BBC director of future media and technology, said the development of a digital strategy at Johnston Press was starting to bear fruit.
Excluding digital recruitment and its directory business, online revenues surged by 32.2% year-on-year in the 18-week period, albeit from a low base, with most of the growth coming from digital display advertising. Excluding digital recruitment and its directory business, online revenues surged by 32.2% year on year in the 18-week period, albeit from a low base, with most of the growth coming from digital display advertising.
Revenues from the digital property business rose 75% year-on-year for the period, while automotive surged 144%. Revenues from the digital property business rose 75% year on year for the period, while automotive surged 144%.
Johnston Press-owned DealMonster, the GroupOn-style daily deals service targeting local communities, has grown revenues by 278%. Johnston Press-owned DealMonster, the GroupOn-style daily deals service targeting local communities, has increased its revenues by 278%.
Highfield said it will make a "seven-figure" contribution to Johnston Press's bottom line this year.Highfield said it will make a "seven-figure" contribution to Johnston Press's bottom line this year.
"It is a good bellwether of the long-term future viability of the business," he said."It is a good bellwether of the long-term future viability of the business," he said.
Highfield said that the financial update was positive, but he remained cautious.Highfield said that the financial update was positive, but he remained cautious.
"We need to be circumspect," he said. "The macro-economic climate is [still] challenging, but we are growing the digital business and we are cutting our cloth accordingly. We are making the business viable for the long haul". "We need to be circumspect," he said. "The macro-economic climate is [still] challenging, but we are growing the digital business and we are cutting our cloth accordingly. We are making the business viable for the long haul."
Highfield said that despite the tough market conditions, the rate of decline in ad revenues has been has been slowing in each of the first three months of the year.Highfield said that despite the tough market conditions, the rate of decline in ad revenues has been has been slowing in each of the first three months of the year.
This did not hold in April, which he said was hit by the phasing of the Easter break and unseasonably bad weather, however Highfield said the trend is promising. This did not hold in April, which Highfield said was hit by the phasing of the Easter break and unseasonably bad weather, but he said the trend is promising.
The company has relaunched 183 of its titles to date, which Highfield said helped limit circulation revenue decline to just 0.8%.The company has relaunched 183 of its titles to date, which Highfield said helped limit circulation revenue decline to just 0.8%.
Highfield said he remains confident that Johnston Press will show positive circulation revenue growth for the year, which would be impressive in a tough market for printed press.Highfield said he remains confident that Johnston Press will show positive circulation revenue growth for the year, which would be impressive in a tough market for printed press.
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