Johnston Press has revealed that it cut costs by nearly £50m during 2009 in its end-of-year results published this morning.
The UK’s second biggest local press publisher said 2009 had been “an extremely difficult trading year” but claimed that “a measure of stability” was now returning to the local newspaper market.
Today’s report reveals that JP made a pre-tax loss of £113.8m last year including write-offs such as the cost of the two printing presses it closed in Scotland and the Irish Republic.
Taking these out of the equation, however, the group returned a pre-tax profit of £43.3m.
Chief executive John Fry said: “The year ended with the group in a much stronger position than it began: advertising is more stable; circulation trends have improved; digital revenues are growing; our cost base has reduced significantly and we have renegotiated finance facilities for three years.
“We are therefore well positioned to take advantage of any upturn as it occurs. Since the successful refinancing of our debt announced at the end of August 2009 we have been trading in line with the expectations we had at the time.”
In the report, chairman Ian Russell said: “2009 was a difficult year for regional media and Johnston Press has been adapting its business to better meet the challenges of the current market and the changes faced by the industry.
“Although conditions remain tough, I am pleased to say that the past year has seen a measure of stability returning to the markets in which we operate.”
The group’s total revenues during 2009 were £428m, down £103.9m on 2008. Most of this drop was accounted for by a fall in advertising revenues of £96.4m.
Despite a debt reduction of more than £50m and the agreement of a new three-year refinancing facility with the banks, the group remains heavily indebted, with net debt standing at £422.1m.
The report revealed that operating costs were £49.3m lower last year than in 2008, with a “further reduction in costs” anticipated in 2010.
It said this was achieved through consolidation of many back-office processes onto fewer sites, and the closure of the two printing presses through investment in improved IT systems.
Elsewhere, the report makes reference to the ongoing trialling of online paywalls on six local websites which began in December, as first revealed on HTFP.
“As our content on local communities is often unique, we believe that we are well positioned to test whether users would be prepared to pay for their content delivered through local websites,” it says.
“It is our belief that the issue is not only the willingness of customers to pay for news content but also the ease of payment which particular mechanisms provide.
“No decision has been made to roll-out paywalls across our sites but we remain open to developments in this area.”
Finally, in his chairman’s statement, Mr Russell pays tribute to the group’s former chairman and chief executive Freddie Johnston who is retiring from the board next month.
“Freddie’s departure from the board is a genuine landmark for the company. He has served as a director for over 50 years and, of course, for many years was chief executive before becoming chairman. He will be greatly missed,” he says.
Comments
Observer (11/03/2010 10:01:11)
“We are well positioned to test whether users would be prepared to pay for their content delivered through local websites.”
Not if it’s cut and paste press releases, tributes culled from Facebook and endless charity appeals and coffee mornings.
Maybe if there’s some investment in quality journalism.
So, pretty much no chance then.
Disgruntled (11/03/2010 10:22:09)
The report was issued by a PR agency. I wonder how much JP paid for that… and could it really not find someone within the company capable of writing and issuing a press release?!
hilary (11/03/2010 11:08:28)
Greenslade says the profit margin is still 16%. Not as good/bad as 30%, but still ridiculous when it means the shareholders are coining it off the backs of the unemployed!
Anon (11/03/2010 11:20:47)
Want to save more cash, Johnston Press? OK, why not get rid of the executives, who have been getting away with ruining the industry for far, far too long now.
Sam (11/03/2010 11:42:15)
The following statement is included in page one of the report.
“The year ended with the Group in a much stronger position than it began: advertising is more
stable; circulation trends have improved; digital revenues are growing; our cost base has reduced significantly and we have renegotiated finance facilities for 3 years.”
Tut tut tut. Why is ‘group’ written as ‘Group’? And it should be “three years” not “3 years”. Ever heard of house style, John? Nah, didn’t think so. Was your statement written directly on to the page and sent without scrutiny from a sub-editor?
ExJP (11/03/2010 12:11:53)
…and when JP cuts its redundancy payments further in time for the next round, it’ll save even more. Best thing I ever did was leave that company!
regionalhack (11/03/2010 13:31:58)
Any chance of cutting costs further by stopping the huge pension JP pays out to former chief exec’ Tim ‘spend spend spend’ Bowdler who left the company crippled and delirious by nearly half a billion pounds of debt?
No not a chance in hell, better to cut costs by cutting jobs, loyal employees instead of here today, gone tomorrow management.
richard meredith (11/03/2010 16:31:41)
Dig into JP’s figures and the operating profit was 16.8 per cent apparently. On the one hand, a far larger profit than many of its competitors ; on the other – at what a cost? The answer I’m afraid is also in the pudding… JP has had to write down the value of its newspapers by a HUMUNGOUS amount.
Babies and bathwater is an expression that comes to mind.
JP Worker (12/03/2010 09:42:33)
Pssst – wanna know how to save more money? Get rid of the swathes of do-little middle managers, jumped-up little ad reps-turned-MDs, lavish company cars and barely used offices. Might save way more than shifting out poorly-paid editorial assistants and experienced journalists.
richard meredith (12/03/2010 12:40:28)
Spot on, ‘JP worker’ and many others … what any good management would be doing in this situation is to find ways of ENCOURAGING their core people and not continuously hitting them over the head with a succession of large hammers. In times of great stress managers worth their corn will find ways to motivate their key people,incentivise them and raise their morale. In a service industry, if you have no staff you have no business. So c’mon senior JP mangement, it’s time to get positive. let’s see if you can turn it around…
woldsman (16/03/2010 10:55:30)
I can save JP more money. Get rid of all MDs who have no knowledge of newspapers, editorial directors who have lost their way and all the staff who have no official training in subbing who are trying to lay out pages. Yes, this would be real progress. PS: How about taking back those experienced skilled journalists who know a good story when they see one and who know how to generate enthusiasm and maintain morale? Too easy for JP, I’m afraid!!!!!!
tbowdler (17/03/2010 16:46:39)
More caviar anyone?
h.bouquet (17/03/2010 16:49:11)
Would I pay to read local newspaper content online? No.
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