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Johnston half year profits rise to £82m despite advertising challenges

Johnston Press has seen half year pre-tax profits rise to £82.2m, thanks to a combination of “organic growth initiatives and tight cost control”.

Despite reporting a challenging period for the six months to June 30, the regional newspaper publisher recorded a nine per cent increase in pre-tax profits. This was helped by a strong growth in electronic publishing which made a profit of £3.1m.

Its interim results show there has only been a marginal increase in advertising revenues, and this has coincided with an increase in the price of newsprint.

And chief exexcutive Tim Bowdler said he did not anticipate any improvement in the advertising environment for the rest of the year, although other factors such as tight management of costs meant that a satisfactory result for the year as a whole was expected.

He said: “Although advertising revenues increased in the period by 0.7 per cent the true like-for-like performance, when adjusting for the impact of the 53rd week in 2004, was a decrease of 0.8 per cent.

“This performance was driven by significantly differing conditions in our various advertising categories. Employment advertising was the most difficult category; it started the year strongly and then decreased sharply at Easter and stayed this way through the general election.

“The overall decline in the period was nine per cent, albeit measured against tough comparatives, and there has not yet been any sign of recovery since the half year.”

The group publishes more than 250 newspapers including the Yorkshire Post, Blackpool Gazette, Sheffield Star and Portsmouth News, and in August it bought 35 weekly newspapers which had previously been owned by Score Press. The new titles have not contributed to the half year results.

Newspaper sales for the group were also flat year on year, with a number of price increases offsetting falls in circulation.

It is continuing to remove bulk sales from its reported figures, and after the ABC period for the six months to June 30 there will be no more bulk sales reported for any Johnston Press title.

The group has also taken steps to address the issue of bad debt on its direct delivery sales in advance of a change in the ABC rules, and this has also had an adverse effect on some of its reported circulations.

Other revenues were up by eight per cent, with Internet revenues up 32 per cent, thanks primarily to the success of its CV matching service which was launched last year.

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