Profits fell by 27.9pc at Johnston Press last year, new figures revealed today show.
The local and regional newspaper publisher made an operating profit of £128.4m for the year ending 31 December 2008, down from £178.1m.
The company also warned today that the slump looks set to continue as advertising revenues so far in 2009 are down 35.9pc compared to last year.
Total revenues fell 12.4pc from £607.5m to £531.9m, UK advertising revenues dropped by 16.8pc and newspaper sales revenue decreased by just 1pc.
The company says it implemented a cost reduction programme during 2008, saving £32.3m.
JP’s net debt reduced by £214.9m, digital revenues were up 31.1pc to £19.8m and contract printing revenues rose slightly by 2.6pc to £35.9m.
Chief executive John Fry said: “We need to plan for the turn of the cycle, which will undoubtedly happen.
“Advertising markets remain very depressed with advertising revenues to date in 2009 35.9pc below those for 2008.
“However, we are benefiting from the full effects of the 2008 cost reduction programme with more initiatives in place which will drive further efficiencies.
“Costs for the first two months of 2009 are running 15.7pc down on the same period in 2008.
“In the short term, there is little prospect of a turn in the advertising cycle and our expectation is for 2009 to be a very challenging year with revenues significantly below 2008 levels and only partially offset by lower costs.
“Johnston Press will continue to develop its traditional print operations in a cost effective way whilst at the same time enhancing and upgrading the digital publishing platforms.
“We will remain an invaluable source of news, information and entertainment in local markets which will enable us to be the business partner of choice for local advertisers as we have been for many years.”
Strikers from JP’s Yorkshire Newspapers travelled to London to greet Mr Fry and finance director Stuart Paterson who are in the capital today to brief City analysts.
The group leafleted JP chiefs and city workers about their campaign and spoke briefly with Mr Fry and Mr Paterson before their meeting.
Jeremy said: “These profits are not as high as the record levels of previous years but Johnston Press is still taking millions of pounds out of local economies where they are also cutting jobs.
“The profit margin of 24pc is much higher than most industries would dream of achieving.
“We want Johnston Press to invest these profits into quality papers and websites to safeguard the future of the company – not to use them as a get rich quick scheme for speculators.”
charlie roberts (11/03/2009 10:34:43)
Digital revenue up 31 per cent. Great.
Digital ad revenue only about 3 per cent of total revenue. (ie 3 quid in every 100)
Not exactly land of milk and honey in cyberspace.
But we live in hope.
sickner (11/03/2009 11:03:00)
This will make you feel even worse:
regionalhack (11/03/2009 11:50:31)
Only a company that expects 30% profit margins could complain about a profit of £128.4m. But no, not JP.
Observer (11/03/2009 12:28:05)
Sickner. Thanks for the link.
I’m sure an article by somebody who hasn’t had their nose in the trough for years might give a more balanced view.
But I suppose journalists haven’t time for balance any more, they’re busy making people like him rich while driving themselves into the ground.
He blames the government on the one hand. Interesting approach.
And then says readers aren’t buying newspapers like they used to. I imagine that’s because companies such as Johnston Press have been ignoring quality for years.
Most companies are sitting tight and waiting for the inevitable upturn – when it comes these media groups will again be found out as the fools who couldn’t plan their way to the toilet.
hotmetal (11/03/2009 12:31:45)
Just think, they’d have made even more money (even MORE than £128m profit! In a RECESSION!) if they didn’t have to splash out on PA’s strikebreaking service in Yorkshire.
JP Grind (11/03/2009 13:10:38)
Well here’s a suggestion – why not cut the management’s company cars, petrol allowance and paid-for parking spaces? Why not slice out some of the do-nothing middle management? But no – it makes sense to strip long-serving editorial assistants on a pitance (who have served loyally for 30-odd years), subs (who save the paper from getting sued) and leave ground-level reporters (on a pittance) scrabbling around doing three people’s work to try and fashion something resembling a paper. Welcome to the world of JP.
Major Eyeswater (12/03/2009 10:00:05)
“… more initiatives in place which will drive further efficiencies.”
I wonder what those initiatives could possibly be.
Would they by any chance involve further slashing of “headcount” and making the “lucky few” who remain do more work across all those various platforms?
Good luck to you all.
soothsayer (12/03/2009 10:13:47)
charlie roberts had a good point. JP and others have run down their papers at expense of internet.
Now the truth has dawned. There’s no really big money in the internet.
10 million hits on a road crash is no good if a. advertisers are not interested. b.you are giving it all away free.
Anyone thought of bringing back proper LOCAL locally edited newspapers. Back to the future.