Johnston Press has ruled out making any “significant acquisitions” this year and has warned it is beginning to feel the impact of a slowdown in advertising.
The regional newspaper group posted a 4.6 per cent decline in profit to £178.1m for 207, with revenue up 0.9 per cent to £607.5m.
In its end-of-year results, published this morning, Johnston said print advertising revenue fell 2.1 per cent in 2007.
Early indications based on the first few weeks of 2008 pointed to a 4.2 per cent decline in ad revenue compared with the same time last year, with motoring and property advertising among the worst-hit.
Chairman Roger Parry said: “The main factor influencing 2008 is expected to be a continued general lack of confidence which suggests that advertising markets will remain challenging.”
Chief financial officer Stuart Paterson said the publisher – which owns 318 titles – was unlikely to buy any more businesses this year given the current economic climate.
“I think the situation in our sector is such that it would probably be difficult to do any significant acquisitions,” he told reporters this morning.
He added that the company was looking at further ways to reduce its costs.
“That’s been our modus operandi for the last 10 years,” he said. “I don’t see that changing in the future.”
Despite fears of a downturn, Johnston Press has pledged to continue launching “innovative new print products” in parallel with its digital activities.
It spent £9m last year developing new digital channels, and digital revenues rose by 34 per cent last year to £15.1m, but this still accounts for only 2.5 per cent of the company’s total turnover.
The company has also claimed a 24 per cent increase in unique users to its network of 323 websites.
Parry confirmed this morning that the company would begin looking for a replacement this year for Tim Bowdler, the Johnston Press chief executive who has announced plans to retire in 2009.
The company’s share price has fallen by more than 50 per cent in the past six months, down from 382.25p to 188.25p. The company now has a market capitalisation of £543m, down from £1.1bn in September last year.