Regional publisher Johnston Press reduced costs by £7.6m in the first half of 2015 as revenues fell by 4.6pc.
In its half-yearly results issued today, the group said it had been hit by a “slowdown” in general trading in the period April to June, although July had seen “some improvement.”
The figures showed revenues down 4.6pc at £128.9m compared to the first half of 2014, while pre-tax profits were up from £8.3m to £17.8m, reflecting reduced interest payments since the group’s refinancing deal last year.
The group also made cost savings totalling £7.6m in the period, although £2.6m of this was used to fund digital investment.
Digital audiences grew by 20pc to an average 19.9m monthly, while digital revenues increased from £14.1m to £16.5m, representing 20pc of all advertising revenues.
However print advertising revenues fell by 9.5pc to stand at £64.1m while circulation revenues fell 5.3pc to £37.1m.
Today’s report showed that the group’s net debt, which stood at £303m at the start of 2014, has since been reduced to £180m.
And it revealed that the ‘Newsroom of the Future’ initiative, which saw teams of journalists working across multiple titles, will be followed by a parallel project for advertising staff called ‘Salesforce of the Future.’
The report said: “The group continues to transform the business in line with the strategic priorities previously set out.
“The group has completed the first phase of a major structural change, implementing Newsroom of the Future (which aims to increase digital engagement, and arrest print decline rates, whilst improving operational efficiencies) across the group, and has commenced the planning and design for the implementation of Salesforce of the Future (a project aiming to increase customer penetration, focus on solution selling and improve digital upsell).”
Chief executive Ashley Highfield commented: “Trading conditions in the first half of 2015 have undoubtedly been challenging, with May and June being particularly difficult – a time when there was also a high degree of uncertainty in the wider market.
“However, we believe, local publishing, with SMEs representing 80pc of our advertising revenue, is not as volatile as national publishing.
“We have seen some improvement in reducing the decline in advertising revenues in July compared to July 2014. We will continue to drive for further improvement in revenues, albeit off a lower base, and will also continue to target further cost savings.
“Our strategy remains constant and is showing real traction. Digital now accounts for over 20pc of advertising revenues, up from 13pc two years ago.”
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Good work Ash. “Cost” cutting is an always welcome strategy.
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They have to do it but “we will also continue to target further cost savings” would send a shiver down my editorial spine if I worked for this mob. Higher ranking execs with no identifiable media skills will stay, of course, while journalists, subs and production staff will face the axe, as ever. The Salesforce of the Future also intrigues. Anyone care to explain?
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Pssst….wanna buy some JP shares while they’re still worth anything at all?
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Undermining the foundations of any structure will have only one result – it collapses.
It may struggle on for a while, swaying and creaking in the wind, but without anything solid left to hold it up, eventually it will fall over.
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The advertising staff at the six free titles recently announced as closing later this month are presumably not “of the Future”.
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But surely digital revenue is growing as a percentage of total advertising revenue – because print and circulation revenues are falling like stones?
And when the profits warning was issued recently it was due to uncertainty over the election – so what is causing uncertainty in the wider market after the election of a majority government at the beginning of May and with the UK now the economic powerhouse of Europe?
I wonder if it is a case of the ‘wrong kind’ of uncertainty in the market.
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‘Real traction’ as in sliding down a glacier towards the abyss traction?
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Old hack… No I don’t!
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I make that 80 per cent of advertising income from print. A miracle considering the butchery.
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and what percentage of the 20% digital revenue is actually fudged figures ie print bookings split back at the office to look like digi bookings
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Aha, I thought there might be a Salesforce of the Past involved somewhere here. No-one denies cuts have to be made but it’s always the wrong people who have nothing specific to contribute who are spared the chop, suits fiddling away on the administrative margins and brown-nosing the top echelons. Enough I say!
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“Our strategy remains constant and is showing real traction. Digital now accounts for over 20pc of advertising revenues, up from 13pc two years ago.”
I am not the greatest at maths, but I make the percentage increase of digital at 3.5 a year.
In only a little under 23 years, the digital revolution will be complete. Print will be redundant and finally be consigned to the dustbin of history, along with steam trains, and, I would hazard a guess, the management of JP.
However, I may have underestimated the Salesforce of the Future effect, of course. With an empowering moniker like that backed by “real traction”, they should easily be able to shed a year or three of that figure.
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One thing JP didn’t do to reduce costs after revenue fell was to cut Ashley’s bonus. Let’s not forget that we’re all in this together.
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Kenny G
I can only think regionals like JP and Archant turn an blind eye to reps skimming off print revenue to book onto digital believing that a little bit off already dire print revenues moved to web doesn’t make print look much worse but makes the digital revenues look like they’re growing
if someone had the balls to stop this common practice you’d still see bad print figures but the true picture of limited growth if any in web as a result would emerge ,but it suits the bean counters and commercial managers targets and figures so they look the other way assuming the top floor johnnies ( Is he still there?) are gullible enough to believe it.
This has been raised at no prospects house on a regular basis but still nothing is done about it.
Poor state of affairs when results are so bad they have to ignore figure massaging to be able to show a bit of ‘ growth’ and find something ‘positive’ to report back
They must think the shareholders are daft enough to believe it.
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I am glad I was given the boot, I am now free of being part of a failing newspaper.
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Sad that single digit declines are now celebrated as big wins.
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