Johnston Press this morning reported a like-for-like drop of 5.4 per cent in advertising revenue in the 18 weeks to 6 November saying a slump in the recruitment sector had caused revenue to fall below expectations.
The regional publishing group, which counts The Scotsman and Yorkshire Post amongst its flagship titles, said ad revenue in the four-and-a-half-month period had improved on declines in the first half of the year, which stood at 6.3 per cent.
Property advertising continued to grow along with a number of other categories, Johnston Press said, but over the 18-week period recruitment advertising was down 29.1 per cent year on year.
‘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, the declines have been sufficient to slow the overall rate of improvement in advertising performance,’the company said in an interim management statement.
Johnston said decline in print advertising revenues excluding recruitment over the 18-week period was 2.5 per cent. Digital advertising growth has continued with employment ad revenue continuing to gain market share, the company added.
Despite the increasing cost of newsprint, Johnston Press said it had continued to make cost saving and expected total savings for the year to exceed £20m.
Johnston Press said that to further reduce costs in the Republic of Ireland, where economic conditions remain very difficult, its Limerick print operation would be closed resulting in an exceptional cost of £5m, the majority of which related to the write-down of the press’s asset value.
The company said it had reduced its debt burden by £13m so far this financial year bringing total debt down to £388m.
This decrease allowed Johnston Press to bring forward a £30m reduction in its debt facilities from 2011 to September this year saving the group around £1m in interest costs, the company said.
‘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,’the company added.