Johnston Press reported a statutory pre-tax loss of £113.8m for 2009 as it wrote down the value of its newspaper titles and wrote off the cost of printing presses which were closed in Scotland and Northern Ireland.
But despite one of the toughest years in the regional press ever, Johnson managed to deliver an operating profit margin of 16.8 per cent with operating profit of £71.8m (down 44.1 per cent year on year).
Johnston is the UK’s second biggest regional newspaper publisher with 18 daily titles, including the Yorkshire Evening Post and The Scotsman, and more than 300 weeklies.
Drastic cost-cutting meant that despite revenue for the year dropping 19.5 per cent to £428m, the company made a profit before tax of £43.3m (a drop of 56.2 per cent year on year). This is the figure before the cost of the legally-required write-downs in the value of assets.
Advertising revenue was down 26.5 per cent, or £96.4m, year on year with the rate of decline improving from 33.9 per cent in the first quarter to 11.2 per cent in the final one. The improving trend has continued with the rate of decline running at 7.3 per cent year on year in the first nine weeks of 2010.
Property and car advertising both returned to year on year growth in December.
Chief executive John Fry said: ‘The year ended with the group in a much stronger position than it began: advertising is more stable; circulation trends have improved; digital revenues are growing; our cost base has reduced significantly and we have renegotiated finance facilities for three years.
‘We are therefore well positioned to take advantage of any upturn as it occurs. Since the successful refinancing of our debt announced at the end of August 2009 we have been trading in line with the expectations we had at the time. That being the case we have no immediate plans to raise capital”
Johnston has managed to reduce its debt from £477.3m at the start of the year to £422.1m.
It revealed in August that it has a three-year debt facility of £485m in place, albeit at a greatly increased cost of borrowing. Refinancing costs alone for trhashing out the new deal were £16m.
Cutbacks have seen operating costs which were £49.3m lower in 2009 than in 2008. The company revealed that it has axed one in four staff compared with two years ago and that there will be further cutbacks in 2010.
Johnston revealed that it abandoned the sale of its titles in the Republic of Ireland because ‘a suitable price could not be achieved’and that ‘no further sales are being contemplated”.
The company said that the rate of circulation decline for its daily titles reduced from 7.8 per cent in the first half to 6.3 per cent in the second half and in the weekly paid-for titles from 7.2 per cent in the first half to 4.6 per cent in the second half.
Johnston revealed that its pension fund deficit has increased by £65.9m over the year which has led to the proposal to close the final salary pension scheme to existing members from June this year.