Regional publisher Johnson Press has seen operating profits rise 16pc despite a fall in revenues, as cost savings of nearly £13m were made in the first half of 2012.
The interim results for the company were published this morning showing operating profit including non-recurring items was up 16pc at £37.8m, representing an increase of £5.2m from last year.
This comes despite revenues for the period being down to £176.1m from £191.8m last year, a fall of 8.2pc.
The statement says costs were cut by £12.8m for the first six months of the year and the company is on track to make total cost savings for the year of £25m.
Ways in which this has been done include simpifying JP’s management structure, closing certain printing facilities, moving out of offices which are not fit for purpose and reducing its contact centres from 14 to two.
Net debt at the publisher has been reduced further and stood at £332.1m at the end of July, which was boosted by News International being released from a printing contract, which gave JP a compensation payment of £30m.
This payment was significant in helping increase the operating profit because when this and other non-recurring items are excluded, the operating profit fell by 8.7pc to £30.4m and pre-tax profits fell by almost half to just over £8m.
The statement highlights changes made under chief executive Ashley Highfield’s plans to transform the company, which will see all titles relaunched before the end of this year and an increased focus on digital.
It says the first 23 relaunches have been a success and iPad apps have been launched for seven titles, with The Scotsman’s app already being downloaded 20,000 times in the first half of the year.
The statement shows newspaper sales revenues were down 3.1pc for the first six months, which included the impact of the five papers which switched from daily to weekly publication in May.
Excluding these titles, the fall was just 2.4pc and the statement says the circulation revenues were also affected by some cover price increases being delayed until after the relaunches of the titles.
Print advertising revenues were down 12.5pc, but digital revenues grew by 8.4pc in the period, with digital property advertising seeing a growth due to the launch of a new property site in the spring, in partnership with Zoopla.
And the statement said the Olympics had failed to boost advertising revenues, with the first six weeks since June seeing total advertising revenues down 14.7pc.
Ashley said: “The first half has been a period of tremendous activity and we have made significant progress. Johnston Press is going through a strategic transformation.
“As we continue to develop our digital portfolio, refresh our print offering, reduce costs, and use our substantial operating cash flow to bring down our debt, we are increasingly confident about the success of the strategy and the benefits that it will deliver.”
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Does this mean I get my pay rise in January then? Or maybe just redundancy? Tbh i’m not fussed which…
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In what way have the relaunches been a success? Facts are missing here. Have the papers increased sales, stayed the same or increased profitability? Not what I’ve heard… Ashley has been remarkably quiet on his ‘success’. We all saw what fuss was made of the NI £30m. He’d be shouting it from the rooftops if his idea had worked….
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heard from those still working for JP that many papers dropped about 20 per cent after price increases and some reader dislike of new design. Good to see digital up, although still a relatively small income stream at present. Encouraging signs on digital.
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I find it remarkable that amid all the tub thumping there is no regret for the jobs lost:
Ashley said: “The first half has been a period of tremendous activity and we have made significant progress. Johnston Press is going through a strategic transformation.
“As we continue to develop our digital portfolio, refresh our print offering, reduce costs, and use our substantial operating cash flow to bring down our debt, we are increasingly confident about the success of the strategy and the benefits that it will deliver.”
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Has anyone else noticed the deafening silence coming out of Edinburgh regarding the relaunches?
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I’m not going to lose out on my pay rise in January.
This is largely because I’ve been “strategically transformed”.
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If you strip out the non-recurring items (especially the £30m from Rupert) pre-tax profits are down by half. JP admits that advertising revenues are down nearly 15 per cent in the first six weeks of the second half. Newspaper sales and contract printing will also see big falls in H2. Digital revenues are failing to plug the gap. As others have said, if the relaunches were a success we would have got some numbers today. We didn’t. Anecdotally, they’ve been a disaster. Constant upheavals, such as Sales inEffectiveness, are undermining the ability to earn revenues. Administration beckons.
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Anyone at JP want to discuss the relaunch figures with us?
Not so we can pour scorn, but the troops would genuinely love to know what’s happening.
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How safe are our pensions I wonder? (Ex-JP, approaching retirement, rather worried.)
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Fred, if you are an existing pensioner then your pension is safeguarded in the sense that if money is short existing pensioners get priority. It’s one of the reasons why some of us want to take our pensions early.
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The biggest worry for us is the continuing state of the ad figures. They are worse than the other Groups have reported and getting worse. This seems to be glossed over as we gloat about cost cuts and relaunches.
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so they paid Spaniards £300,000 to come up with ground-breaking ideas like purile vox pops (yawn) and tiny pictures that incense readers. But since the designers had about three months instead of usual 18 the reported sales dives can hardly be a surprise, when combined with price increases in a depression-recession-slump.
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Next up, more editors will go and the smaller regional dailies, JP and elsewhere, will switch to weekly…..
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The news here is what is not being said. That the ad trends are getting worse not better, that the rise in digital revenue is dwarfed by the decline in print revenue, that we have the one-off benefit of Murdoch’s money but the lost future revenue from the contract, that if the relaunches and the i-pad apps were a success we’d be seeing some meaningful figures and that the advertising figures for JP are much worse than the figures reported by the other big groups for the same period.
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it’s depressing how little faith the upper management have in their own workers to the extent where they pay Spanish designers a small fortune to design templates supposed to appeal to a UK audience (work which could have been given to those being ‘transferred’ to Mumbai)
the advertising question is another conundrum. We’re seeing a lot of BBC execs joining the company – the Beeb has a strong web presence of course so this experience should be valuable (or as they might have it, integral to leveraging the synergies of the team).
However, has no-one spotted that the BBC is a publicly-funded organisation which has never had to sell an advert in its existence?
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From what I’m hearing the relaunches aren’t giving that much of a sales bump, and in many places it’s been very short term curiosity.
Apparently readers care much more about the content rather than design. Who could have predicted that?
And the new designs aren’t very well liked anyway – with things like pics being too small and poor “navigation” putting people off.
So that £300k, plus all the extra costs and additional training has been for what exactly?
Still, I suppose they can always sack another 7 or 8 more editors to make up for it.
And this is the problem. Good people – editors and reporters – who know their patches are being sacked. Group editors are covering huge areas and the “USP” of being local is going out of the window.
Put simply, papers are losing touch with their communities for very short term gains.
The technology is still crap, people are still being fired by the shedload, revenues are getting worse, sales are plummeting, staff wages are being frozen.
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