Newsquest‘s Herald & Times division recorded a fall in pre-tax profits of 39 per cent last year after heavy restructuring costs, impairment charges and a decline in advertising revenue.
The Glasgow-based publisher of the Herald, Evening Times and Sunday Herald, recorded a profit of £14.4m last year, down from £23.8m in 2007, according to the Herald.
The company said the fall in profits came about as it took an impairment charge of £3.86m against the cost of its publishing licences for the Great Outdoors and Scottish Farmer magazines, along with ‘exceptional restructuring’costs of £2.28m.
In December the company started a major restructuring of its editorial operations telling editorial staff they must all reapply for jobs at the company, of which there would be 40 fewer.
The moved caused outcry in Scotland with Alex Salmond, Scotland’s first minister, urging parent company Newsquest, which is in turn owned by US media giant Gannett, to rethink the decision.
Journalists now work across all the company’s titles in print and online.
The Herald report says accounts filed by the company for 2008 highlight the impact of the decline in advertising revenues last year, however it did not reveal the figures.
Underlying revenue, before exceptional charges, declined by 16 per cent with turnover falling eight per cent from £86.8m achieved in 2007 to £79.5m last year.
Tim Blott, managing director of Newsquest (Herald & Times), said growth of the company’s digital business (15.1 per cent) and the stable performance of its magazine division was not sufficient to offset ‘significant revenue decline’in its print titles.
He said: “It is still a very challenging market but the changes we made leave us in a stronger position for when the upturn comes.”