Johnston Press has announced record operating profits of £101.6m, according to half-year results out today.

This was despite the period suffering a sustained downturn in advertising revenues - and an increase in the cost of newsprint.

The company report said the figures reflected continued progress on containing costs - with £11m of cost savings - and improving operating efficiencies, coupled with ongoing "organic" revenue growth initiatives in print and digital publishing.

Profit before tax was down 2.9 per cent, £79.8m, a reduction of £2.4m from the record level attained in the first half of 2005, because of the downturn in advertising.

Chief executive Tim Bowdler said: "The second half has started as the first half finished with no discernible improvement in advertising revenues.

"Our assessment of the underlying market conditions does not suggest any early recovery in revenue performance.

"The group continues to maintain a tight control of costs and will benefit from the first full year contributions from the acquisitions made over the past 12 months.

"With the steps we have taken in managing our cost structure and the clear strategy in serving local communities, we consider the Group to be well positioned for any recovery in the advertising cycle."

New products launched in the first half of the year included more than 30 community newsletters targeted at new advertisers and published for small rural communities or selected city suburbs. Johnston also launched a number of niche publications with lifestyle themes in the communities it already serves.

Overall, like-for-like advertising revenue was down 8.8 per cent during the period - print down 9.2 per cent, digital up 13.4 per cent

Newspaper sales revenue also grew, by 1.9 per cent. Price increases more than offset the continuing circulation decline.

And there was "strong progress" in digital publishing, with double digit revenue growth, page impressions up 52 per cent and unique users up 65 per cent.

The overall figures showed operating profit before non-recurring items and associates rose 7.8 per cent to £101.6m, with operating margins on acquired businesses - Scotsman Publications - of 23.9 per cent and on existing business of 35 per cent.