More than 600 jobs were lost at Johnston Press last year as the company posted its first rise in profits for seven years, annual results have revealed today.
The regional publisher introduced an enhanced voluntary redundancy scheme for staff last autumn in a bid to help pay down its £320m debt.
Today’s results show that the scheme contributed to a reduction in overall headcount of 609 over the course of 2013, not including staff who left in the early months of this year.
The results also show underlying profits at the group rose 2.5pc over the year to stand at £54.3m, and that net debt fell by £17.3m to stand at £302m.
Total advertising revenues were down 6.4pc during the year at 181.7m, but while print advertising revenues fell 9.5pc, digital advertising revenues rose 19.4pc to stand at 24.6m.
Revenue from newspaper sales was down 2.1pc from 89.6m in 2012 to 87.7m.
Bosses have hailed the increase in underlying profit – the such rise for seven years – as an indication that the company is returning to financial health.
However taking into account restructuring costs of £33m, the cancellation of a £10m print contract with News International, and a write-down of assets of £202.4m, the group posted a statutory operating loss of £245.6m.
Today’s results provide the first indication of the scale of headcount reduction arising from the voluntary redundancy scheme.
The company has previously declined to give out any figures on how many staff took up the enhanced redundancy package.
The financial report says: “As our work to reshape Johnston Press continued through 2013, all aspects of the business were reviewed. As a consequence, we offered a voluntary redundancy programme to all our employees during the autumn which contributed to a reduction in average headcount of 609 over the period.
“This has allowed staff to accept enhanced terms to leave the Group and with a number of them doing so during the early part of 2014. Careful planning has been undertaken to ensure the efficiency of future operations and to maintain quality.”
The added redundancy costs associated with the scheme contributed to overall restructuring costs of £33m – up from £24.4m in 2012.
According to the financial report, the company has now lost almost 1,600 staff over the course of the past two years.
The results also reveal that newspaper cover price rises had a bigger impact on circulation than had been anticipated.
“Whilst overall circulation revenue declines were as anticipated in one or two very challenged economic markets, increasing cover prices during the recession created a greater circulation decline than expected,” the report says.
Commenting on the results, chief executive Ashley Highfield, said: “We are delighted to see a return to underlying operating profit growth for the first time in seven years, with underlying operating profits in 2013 increasing by 2.5pc on 2012.
“Along with slowing declines in print advertising revenues, and a stable circulation revenue decline rate, these are clear indications of good progress during the year in the implementation of our strategy for growth.
“During the year we completed the re-launch of our websites and our print titles, and took the first steps to re-invent community newspapers with significantly higher levels of user generated content.
“With the benefits of our actions coming through, coupled with strong digital growth and a slowing print decline, the Group is well positioned to make further progress in 2014.”
In his chief executive’s report, Ashley hailed the completion of the programme of newspaper relaunches into “more modern standardised templates” during 2013 and raised the prospect of more user-generated content.
“One of the direct results of the relaunch programme is that we now have a platform to provide greater efficiencies in our content gathering operation from our journalists, freelance contributors and readers,” he said.
“Using web-based editorial software the Group is now allowing trusted contributors the ability to author content directly.
“If these trials are successful they will provide a blueprint for the Group to restructure the editorial content gathering operations and greatly increase the volume of locally supplied material.”
Today’s report also makes clear that JP will not sign up to the government’s proposed new system of press regulation underpinned by Royal Charter.
It says: “Lord Justice Leveson made it clear in his enquiry into press standards that the local press was not guilty of any wrongdoing and should not be penalised by any new regulatory system.
“However, we felt that the Royal Charter proposals would not provide smaller titles with adequate protection from vexatious or speculative complaints and the costs associated with processing such claims.
“As a result, and in line with the significant majority of the industry, we have joined the process of establishing the Independent Press Standards Organisation.”
“Along with slowing declines in print advertising revenues, and a stable circulation revenue decline rate, these are clear indications of good progress during the year in the implementation of our strategy for growth”
This could be a quote from BBC’s new satirical comedy drama W1A. Contradictory psychobabble.
-which is all good .
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I’d be interested to know the print ad revenue, not just the digital, and also, how much is enhanced redundancy costing with 609 staff gone? JP push the digital growth in both percentage and income, but the decline of print ad revenue as a percentage only.
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One paper in south has lost its entire reporting staff through voluntary redundancy, though they were already at historic low levels.Guess Churnalism killed them off.
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Highfield’s attempt to put a positive spin on this carnage would be laughable if it were not so sad.
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The odd thing is that you never see these job losses and those from TM, LW and Newsquest – which together are comparatively huge job losses for any industry or profession – reported in the general media let alone the local press?
To those in JP this week taking the walk to what might seem an uncertain future, I wish you good fortune.
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Not just 600-plus in the last year but consider the thousands of jobs Johnston Press has axed over the last decade. Printing centres shut down, offices sold off…it’s not just the effect on the workforce but on their families and the surrounding communities. Morton Newspapers in Northern Ireland and numerous titles across England and Scotland, have suffered equally under this unhappy exercise in expansion and implosion. If the JP story demonstrates anything it is the need for companies to have a legal – as well as moral – responsibility to the people who work for them. Back in profit, maybe…but at what cost?
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Hope this was worth decimating the company for. It’s not really going to work in the long-term, is it Ashley?
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Bungling and inept newspaper management from day one to the end of days. But hope they enjoy good banquets at the Newspaper Society’s Fiddle while the industry burns banquets.
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To be fair, none of the destruction alluded to in the above comments is really the fault of the current chief executive.
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If there were any subs left, they would have a great time with Mr Highfield’s jargon-filled statement. ‘Editorial content gathering operations’ – another phrase for hard-pressed journalists, stuck in front of a screen all day and acting as writers, subs, researchers, picture-sourcers, headline writers and, thanks to a new phone system in at least one JP centre, telephonists, who field and redirect calls that now come direct to them. But don’t worry Mr H, maybe those so eager to contribute, unpaid, to the editorial content, would be happy to pop into Crown Court next time you need to cover a high profile case; there certainly won’t be any trained journalists left to do it. In fact, I know someone who is quite good with figures – retired, not looking for a pay packet … how about it, fancy letting him have sitting in for you next month? You could shave a bit more off those millions.
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If only the company had just been ‘decimated’, JP journo. More that one in ten lost, I think.
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Re: Confused…
These newspaper corporations such as JP rely on getting so much of their raw material, ie news, for free. Yet when it comes to their own doings, they won’t comment to anybody on anything. They are more guarded than the Kremlin at the height of the Cold War.
A young reporter kept pestering the local police station for “some news” until finally an exasperated desk sergeant turned around and told him: “”We’re not a bloody news agency, you know!”
National newspapers hand out the folding stuff to get their information. Incredibly in 2014, the regional press thinks it has a right to get everything for free.
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How much of the digital ad revenue is actually print revenue that by accident was written down in the digital revenue box on the ad form by the reps. Ahem. Just saying…..I’m sure I heard wrong……….
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Put someone who knows less about newspapers than my gran in charge and what do you get? Digital is king. Forget the rest, just token gestures.
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If you weren’t killed in the rush to the exit you may well be finished off by the increasing demands to do more with less for longer at a cheaper rate. Statistics and the use of spin and gloss cannot disguise the fact that we are approaching the end game after years of poor judgment and crack pot theories that became ‘policy’.The web ‘revolution’ was/is propelled, in the main,on the backs of print journalists and photographers.That expertise and experience has been thrown away. UGC. good luck with that.
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Ashley Highfield – “Clearly the redundancy programme contributed to savings and will continue to do so through 2014″ …
By that statement is he saying that there will be a NEW round of redundancies in 2014, or is he meaning the lucky people who got VR when it was offered last year and are still waiting to finish ?
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Highfield may not be responsible for the debt, but he is responsible for the outsourcing of jobs to India and closing local offices, whilst still banging on about supporting local business. To increase revenue in print advertising, increase ad quality. When the designs are comparable to agency creativity, as they once were, there would be a hope of getting new advertisers buying more space. Digital revenue is a drop in the ocean by comparison.
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Using the figures from the JP website, I estimate that print revenue has dropped by about £18 million in 2013, a decline of about 10%. This is a worse trend than the other Groups and means that for every extra £1 of digital revenue gained, £4.50 of print revenue is being lost. This remains the basic problem with ‘digital first’ as does the fact that the revenue gained from horrendously high cover price increases is, surprise surprise, more than offset by the recent shockingly poor circulation numbers. Readers are giving up. The website is free.
Debt is down by £17 million. Just another 18 years to go at this rate before it is cleared.
What still bugs most of us at JP is that despite all the job losses, the top people still come out alright :
http://htfpnew.adaptive.co.uk/2013/news/top-director-leaves-publisher-with-825000-exit-package/
It is a sorry story.
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“We are on a clear journey to become the ‘one-stop-shop’ for advertisers and readers across all media in the communities we serve” quotes Mr Highfield………….so, this shop no doubt will be online only then…
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Shares were down 6% today, the market isn’t stupid. W1A spin at its finest. Just when you though things were bad, it gets worse, I will be jumping at the chance to walk away with £30k in my pocket at the next round of VR.
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As much as I don’t blame Mr Highfield for the mess he inherited, the comment quoted by Cynical just shows the extent of the delusion that exists within the senior management of JP. To suggest that we can serve the communities we claim to as effectively as we once did when we are closing offices, losing staff and making it more difficult for people who want to do business with us to do so is typical of the nonsense that has crippled this company for years.
We’re closing offices, losing staff and making it more difficult for the people that want to use our services to reach us in order to service an unsustainable debt. Those of us who remain still, somehow, care about the quality of the products we are trying to produce, but know deep down that we cannot hope to do our jobs in the way we know to be best. That is the fault of those at the top, past and present, and I see little or no hope for the future.
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We should revise the phrase “at risk of redundancy” and replace it with “in with a chance of getting out of this alive”.
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Strange how little reporting JP titles seem to have made of their job cuts. If local employers made such a proportion of their staff redundant, these papers would be demanding statements ‘in the public interest’. Mind you, other local media also seem to be fuelling the smokescreen.
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The dismantling of JP is very sad to see, not really due to recession either, but to a vast black hole of debt run up by a single previous chief exec’.
Now shedding staff as fast as circulations, leaving redesigned papers (which do look good for local papers) with pitifully few journalists to fill pages with stories and pictures, never mind fill the much talked up web sites (which make a fraction of the income of print).
Quite simply, if you went into a nice new shop which had little stock on it’s shelves, you’d laugh and walkout to a better shop. So it is with JP’s papers, with less local news and photos, less reason for readers to buy, or less profitably, click.
JP should have held onto to their hard working, dedicated journalists, for without them, they will have little left to offer to readers and advertisers, the people who are paying off that vast debt.
A black hole indeed.
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