Regional publishing group Johnston Press said today it expected its year-on-year cost reduction to rise to a total of £15m this year.
The company said it anticipated savings to rise by £5m from a previously advised target of £10m year-on-year cost reduction in 2010.
Johnston Press, which publishes the Yorkshire Evening Post and the Scotsman newspaper, said in an interim management statement that management of costs and cash continued to be key areas of focus for the group as it looked to further reduce costs.
Advertising revenue for the 18 weeks to 8 May was down 7.1 per cent on a like for like basis with the same period the previous year – however, within this digital revenues increased by 12.3 per cent.
The company said: “Advertising over the first quarter was fairly stable. However, performance in April was a little more subdued, primarily due to the general election.
“We would expect the election’s impact to continue through the second quarter and therefore not see any significant improvements in the current trend until Q3, 2010.”
The company said despite the anticipated “softer” advertising performance in the second quarter, it expected its continued management of costs to produce full year results in line with current market expectations.
Net debt at the end of April was £419.1m, Johnston Press said, a reduction of £3m from the start of the year.
In August last year, Johnston Press revealed that it had renegotiated its borrowing terms and had put a three-year debt facility of £485m in place, albeit at a greatly increased cost of borrowing. Refinancing costs alone for thrashing out the new deal were £16m.
Johnston Press then 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. Operating costs were reduced by £49.3m in 2009.
Johnston Press is currently facing a widespread revolt amongst its editorial staff over the planned introduction of the Atex content management system.
The publisher is introducing the new technology, in part, to enable it to reduce the need to employ so many sub-editors, as reporters write into page-ready templates. It also plans to create more regional ‘subbing hubs’ to produce several newspapers from one centre to further reduce costs.
Journalists across Johnston Press intend to hold group-wide industrial action later in the year in protest. Journalists at Johnston Press chapels in Scarborough, Sheffield and Blackpool have already held industrial action.