Regional publisher Johnston Press has cut costs by more than £30m in the year to date as it continues to tackle its £306m debt.
An interim management statement issues today shows the company has reduced its costs by 13.9pc since January, helping drive an increase in operating profits of 7.8pc.
The publisher hailed a 32pc year-on-year growth in digital revenue with monthly unique users across its websites rising to 13.7m in October.
However print circulation revenue was down 4.3pc despite the relaunch of all the group’s titles over the past year.
Today’s statement confirms previous reports that digital revenue growth is now outstripping print revenue decline in some parts of the business.
It says: “The Midlands publishing unit achieved an important milestone, becoming the first to reach a digital ‘tipping point’ in local display advertising for the month of September, where the growth in local digital revenues outstripped the decline in local print revenues.”
Overall costs are down £32.4m in the year to date, although the report does not specify how much of this has been generated by headcount reductions.
The company says debt reduction remains a priority, with a 5pc year-on-year reduction in the year to date and further reductions planned.
Chief executive Ashley Highfield said: “I am pleased to report that our growth strategy is making good progress and has delivered encouraging results
in the period.
“Digital revenue growth remains a priority and the Midlands reaching a “Tipping Point” in local display advertising is a highlight for the business.
“It remains a key goal for the whole Group to reach the point where digital growth will offset any further decline so we can return to overall top-line growth.
“With the refreshed print titles and websites averaging monthly audiences of over 25m and new digital products and services, we believe that Johnston Press remains as relevant to local communities and advertisers, both local and national as it has ever been. We also continue to focus on reducing our cost base whilst increasing our investment in our digital future.”
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Sorry, I am none the wiser than when this ‘Midlands Tipping Point’ first surfaced.
And as a JP shareholder I would be interested to know some of the numbers.
If digital advertising revenue increased in September by, say £20,000 while print advertising revenue decreased by £10,000 that would be a positive – wouldn’t it?
But if the larger percentage growth in digital revenue produced a revenue of £1,000 and a smaller percentage decline in print revenue still saw £10,000 disappear that would be a negative surely?
We need to know the base, gross and net figures.
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Pity then that staff got an email this morning from Mr Highfield saying the business still needed to “get smaller” and we all have “tough decisions and choices to make”.
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What a load of cods-whollop!
A drop in the ocean. I’m sure the interest rate on the debt wipes that saving out within a couple of months! Who are these guys kidding?
Should also come as cold comfort to the dozens of photographic staff in JP’s Midlands division who are to lose their jobs in the New Year because of Highfield’s ‘digital dream’. Cheers Ash.
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It would be very interesting to see the advertising reps’ paperwork. How many print ads are booked and then put down in the digital box?? Just a thought – I am sure it never ever happens
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All these debts were taken on to expand the businesses to create these few dreadful mass media companies that own all the papers.
Are the people who made those decisions still in charge or are they adding to the pension black hole that exists at most these places?
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The axe is falling all over JP and then some staff being given enhanced voluntary redundancy are being offered a great package and a new position with a substantial pay rise to work from home or a “community hub”(public library or similar).
That saves money how then? Same as last time – lose your job, go back as a freelance and make more money than you did before. But you are off the books and that’s all that matters – until JP doesn’t want you again.
And repeat ad nauseam – or until the banks realise what’s going on and put a stop to the whole sorry charade.
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Smoke and mirrors, smoke and mirrors.
They may have saved £30m, but that’s soon wiped out by the interest in the £300m still owed!
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JP seem to prefer talking in percentages because it masks the figures. If pre-press/design work has been outsourced, why hasn’t it all gone? Savings can still be made.
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Golly, I so want to work for JP – a company that is run by loyal, cost-efficient and compassionate people….
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Ah, ‘JP Cost Cut Victim’, I wondered when you were going to turn up to chip in!
I work in Pre-Press and believe me, there are plenty of concerned people. Not concerned as such that they will be made redundant, but rather that they WON’T be made redundant!
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Me, Myself & I – I take it you put in for the enhanced VR then? I simply don’t understand why JP is paying for pre-press/design work in the UK when it is also being produced in India.
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So a 5% year on year debt reduction……………..in 10 years the debt could be halved….probably along with circulation figures and staffing levels…
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Your heart breaks for all these highly skilled people who are losing their jobs… and also an industry which is losing highly skilled people.
This is not a model for growth but a ‘last chance saloon’ scrap for survival dressed up as ‘the way forward’.
Newspapers full of stories written by members of the public… oh, sorry, user-generated copy or UGC if you will, is the final nail in the coffin.
I was ‘voted off’ in 2009 and have never looked back… to all you JP photographers I can promise you the future has never looked brighter
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Re; JP Cost Cut Victim
JP are looking in the wrong place if they want to turn everything around. As you say, all of the advertising work should be by now, produced in India. It has, after all been over a year since this first ads started to be delivered to them.
What JP have they failed/still fail to take into account, apart from technical limitations, is the incompetence of it own sales teams in it’s ability to produce coherent instructions for the teams in India to follow. Some of it, and i’m not joking here, is barely legible to us, let alone, to someone on the other side of the world (to whom English probably isn’t their first language).
This has created the unwanted side-effect, of creating more corrections/alterations than there has any right to be. It’s a huge waste of resources.
The ironic thing is, and i’m sure it all looked good on paper, but this scheme has probably cost them more money then if they had left the Pre-Press departments alone. After all we are only a small team and no-doubt amongst the lowest paid set of workers within JP.
So there you have it. This is why there is still a UK Pre-press department. We are here because of other peoples incompetence.
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Re: Me, Myself and I
Well you seem to have taken my point on board. I thought I made a reasonable comment, worth ‘chipping’ in. I, too, used to struggle at the reps’ shocking briefs, poor spelling etc. JP should be kicking up a stink with EKCS, or preferable the reps (who never appear to face redundancy) if they cannot do the job. I’m sure you are right in that the whole sorry episode has cost JP and a team of the best managers and centres (based in the UK) would have achieved some savings plus raised standards overall.
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I wouldn’t be too hard on KCS, JP Victim, they really are doing what they can with the limited information provided to them. Everything that comes back to us is down to poor planning on part of the sales team, who all the while, hide the behind the excuse that it’s what the customer has requested. Though often I suspect this is BS.
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M,M&I – I agree. Very often, in my experience, it got to the stage when ads were being designed for (and by) the reps. Only when they were happy was it sent to the client. Some reps thought it was their job to be creative, which is when the ads looked poor. The more professional reps had trust in the designer and were able to write a brief, resulting in a job well done, with few alts. Some reps will happily tell the client that ‘they’ will design something for them. No mention is made that a designer will be creating it! The customer can request whatever they want, it’s when that instruction is not passed on by the rep, or the rep takes on the role of the client, that causes issues.
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