Johnston Press hails ‘milestone’ first half as revenues rise

Ashley Highfield, chief executive of Johnston Press
Ashley Highfield, chief executive of Johnston Press
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Newspaper publisher Johnston Press today hailed a strong half-year performance including a double-digit hike in digital advertising revenues and audience numbers.

The owner of this newspaper and hundreds of other local titles and news websites, plus national newspaper The i, reported 4.6 per cent rise in overall revenues, excluding classifieds, for the 26 weeks to 1 July.

Digital advertising revenues jumped by 14.8 per cent, excluding classifieds, year-on-year, while digital audiences grew 15 per cent to a record high of 26.5 million unique users a month.

The group also highlighted an increased contribution from The i newspaper, which it acquired in April last year, with circulation revenue rising from £4.4 million to £11m and advertising revenues from under £1m to £3m.

Advertising revenues were flat for the period – print and digital combined and excluding classifieds – having experienced “heavy declines” during 2016.

The group reported an operating profit for the period of £4.9m, compared with a half-year loss of £211.7m last year when there were major write-downs.

Chief executive Ashley Highfield said that to get to the point where print and digital advertising taken together, and excluding classifieds, were flat rather than in decline was “a really important milestone” and “a hell of an achievement”.

The group said its focus on larger titles that have “significant” print and digital reach had resulted in strong profit contributions led by the national-category titles, including The Scotsman and The Yorkshire Post.

The firm cautioned that trading conditions across the industry continued to be “difficult”, especially in classified advertising, but added that it was seeing the monetisation of its growing digital audience gain momentum.

The continuing improvements in trading trend seen in The i newspaper in the first half are expected to continue in the second half “as advertisers seek out a quality, impartial, concise, daily national news provider”.

According to the latest results, the group had total cash of £28.8m as of 1 July, while net debt was down by 8.7 per cent during the period.

Highfield said Johnston Press had no plans to make significant asset sales in the coming year.

“We have got no plans to make any significant divestments at the moment,” he said. “We were very pleased with the divestments we made last year in terms of the sale prices of Isle of Man and East Midlands titles. We put the money in the bank and are in a sound position.”

He added: “I can never rule out that we might do something with one or two smaller titles. But I genuinely have no plans at the moment.”

Highfield said the strong performance from The i, with its succinct format, was partly due to many readers “being time-poor but they still want a quality experience”.

He said the paper had also benefited from what was seen as a UK general election result showing the electorate “don’t really like to be told what to think”.

Group net debt has come down from £209.4m to £191.2m at the reporting period end.

Highfield told investors: “This is a business which we have long believed needed to transform, but once done, could return to growth.

“Thus, since 2012 we have been making the necessary and at times painful changes to transform Johnston Press into a truly cross-platform business.

“Whilst trading remains challenging, the business has responded and, as a result of our substantial efforts and clear strategic focus, I am very pleased to announce that we have posted revenue growth in the business (excluding classifieds) of 4.6 per cent during the half.”

Analysts at Liberum issued a “buy” note on the shares saying The i and digital initiatives were driving the performance.