Regional publisher Johnston Press saw a 5pc fall in overall revenues during 2017 according to an annual trading update published today.
Figures for the period up to 30 December 2017 showed that while newspaper circulation revenues were up, this was offset by continued decline in advertising revenue.
Total publishing revenues for the group, which include both advertising and circulation, were down 6pc during the year.
However, bolstered by a strong performance from cut-price national daily the i, circulation revenues rose 2pc.
The group also reported a 4pc growth in contract printing revenues and a 3pc uplift in overall digutal revenues, including classifieds.
And it highlighted big increases in web traffic at some of its big-city titles including the Belfast Newsletter, up 48pc, the Yorkshire Evening Post, up 47pc, the Sheffield Star up 42pc and the Edinburgh News up 39pc.
But the trading update also contained a warning that there was “no certainty” a formal proposal would be agreed in relation to the refinancing of £220m worth of debts due for repayment in 16 months’ time.
It said: “Last year, the group announced it had commenced a strategic review to assess the financing options available to the Group in relation to its £220m secured notes which become due for repayment on 1 June 2019.
“The Board subsequently announced that it was approaching its largest bondholders regarding the formation of an ad hoc committee of bondholders, which was formed in October. Discussions with advisers to the ad hoc committee are in progress.
“Any proposal that results from these discussions will remain subject to negotiation and the consent of relevant stakeholders, and there can be no certainty that a formal proposal will be forthcoming.”
Johnston Press spent the latter half of 2017 under threat of a potential takeover by the Norwegian investor Christen Ager-Hanssen, whose Custos group is its biggest single shareholder.
Custos retains a 20.01pc stake in the publisher, but Mr Ager-Hanssen has made no move since an attempt to call an extraordinary general meeting of shareholders in October was ruled out of order on procedural grounds.
Commenting on today’s figures, JP chief executive Ashley Highfield said: “We remained focused on delivering the priorities outlined to shareholders, amidst an extremely challenging trading environment.
“The i has delivered a very strong performance in our first full year of ownership.
“A slowing down of top line decline is encouraging while further growth in our audiences and digital revenues, underpinned by additional cost reduction, enabled us to maintain profit margins.
“In 2018, alongside our strategic review of financing options, we will continue to invest in the business, including recruiting 32 journalists funded by the BBC, and a further 21 editorial staff and 10 specialist digital sales staff as we seek to accelerate digital growth further while reinforcing our offering of quality, trusted content across all platforms .”
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Shocking further revenue declines at JP which underlines where the real problems lie and don’t let the i paper cover up the cracks nor a 3% uplift on digital fool you, 3% of very little is still very little.
with a huge shift to,and reliance on easy to obtain content resulting in weakened papers and the resultant fall off in copy sales it’s no wonder businesses are giving JPs papers a wide berth, out of interest how many commercial roles have been cut in relation to editorial ones? as all we seem to see on HTFP are announcements of further journalistic cuts in order to save costs, surely a self defeating strategy.
If the commercial market is gone and the trend shows it further declining with no sign of a reversal how much longer can high levels of ad staff be tolerated?
Time to cut your cloth accordingly and stop this constant slashing of editorial teams
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Despite the circulation rise of the i weekly sales are falling like a stone. JP have turned once great local papers into a shadow of their former selves. Filling local papers with generic non local content is turning readers and advertisers off in droves. Price rises for lower quality papers is driving people away too. Can the powers that be at JP not see the example of the i and apply it to local weeklies. A quality paper ant a good price. Instead of murdering local weeklies they should pull out all the stops to produce quality products with loads of local news and photographs that readers want to buy. What company ever survived by cutting quality and raising prices. It is not rocket science! Instead, driven by the false promise of digital, which will never make money, they are cutting staff and trying to drive readers onto their websites. It’s a downward spiral… It will end up with local papers closing and going online and then fading away completely. Dump digital and get back to producing quality, news and photo filled weeklies. It wasn’t broken so why try to fix it!?
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Its all about i, while the increasingly feeble weeklies die slowly from reporter starvation despite the heroic efforts of the rump of staff remaining.
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This level of ongoing underperformance is shocking but I’ll wager all other regional publishers will soon be reporting similar revenue losses and sales declines despite clutching at the straws of meaningless web traffic increases or minuscule digital revenue growth.
Small hyper local publishers are thriving by adopting back to basic journalism,not Facebook copy and paste scrapes, reporting on things that matter to communities and by keeping their staff numbers manageable and their costs under control, all without layer upon layer of commercial managers drawing high salaries yet producing nothing , basically they’re doing all the things the bigger boys no longer do.
Without strong copy sales and reader numbers, with ad revenue collapsed, costs escalating and with a failure to monetise digital just what exactly do the once bigger publishing groups have left?
Exactly, nothing
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DDH, you could have saved your comment until tomorrow. It would have been more appropriate on Groundhog Day!
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The bit that is missing here is that the overall revenues, excluding the i are down 13%. That means the regionals are down 13%, so no improvement at all there. Not sure if the i gets any central recharges from the regionals for ‘providing content’. The regionals cannot continue decline that this any longer without serious consequences.
JP is becoming a one trick pony, and that isnt a particularly great trick. They also warn of no being nearer a deal for refinancing which is only 12 months or so away now.
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Sorry about the spelling and grammar in my last post, iPads aren’t the best
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Oliver. I’m sick of your sniping. I will not stop highlighting the faults of JP just because you want me to. I don’t know who you are or who you represent. From your posts you could be AH in disguise. I will never stop pointing out that digital does not work for everything. If you just want to snipe then go ahead. I know of MANY weekly papers which are doing really well by using traditional methods. You seem to me like a toady to the management. Or a scab as the unions would call you. You just criticise from behind your screen but offer no alt argument. I comment on each story as it comes up, yes probably with the same argument but that does not make the argument invalid. You are just a keyboard warrior with no alt argument, basically a waste of space. So from now on I am just going to push my argument story by story. I get way more likes than you. You obviously don’t represent the feelings of most on here. Just go away and clean your brown nose.
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This is probably a better set of numbers than those that will be reported by other regional publishers in a pretty awful market.
The woods are very dense indeed and there isn’t an obvious exit visible, but this update is encouraging.
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Dead digital horse
It WAS broken and it did need fixing due to the alarming level of copy sales losses and decrease in ad revenues due to local papers being no longer valued as credible and effective advertising mediums,investment and strengthening the news teams and a focus on very local community reportage was needed but was ignored, that was 5-6 years ago, However the situation has since declined further and the promised land of local paper digital news sites attracting vast numbers of paying advertisers has failed miserably leaving publishers stranded with papers so few are buying, advert space they’re having to almost give away and web pages no ones interested in advertising on.
The result today is poor, thrown together dailies and weeklies with little ‘news’ content,all desperately following in the wake of social media news sites and failing miserably, so there’ll never be a return to the things you ask for; quality news and photo filled papers, the world has moved on,the audiences have found new and quicker sources of local news and the traditional paper buying market has gone , and no amount of wishful thinking will ever bring it back.
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Thank you Prospectus. You sum it up well. While it is very sad that the traditional print model is broken, doing nothing has never been a realistic option.
DDH, as you can see, people do also agree with me. I simply disagree with your opinion and have no desire to disrespect you as a person. However, I don’t see your real name at the top of your comments so your opinion of me as a ‘keyboard warrior’ is slightly hypocritical, especially as I’ve offered my alternative arguments plenty of times before.
You talk about quality in your first comment then spend the next two posts calling me names simply because you know that I disagree with you. Then, you determine your ‘success’ by comparing the number of likes you get. Isn’t that part of your argument against digital compared with print?
It’s clear you feel you’ve suffered an injustice at some point, as have many others (myself included), but banging on about how things used to be and getting nasty with people isn’t help you.
Anyway, to get back on topic, I’ve regularly stated that local newspapers need to be back in the hands of local organisations who are happy with a modest profit of five to 10 per cent, rather than at the mercy of shareholders who want 25 to 30. Print is irreversibly broken and local ownership may only extend its lifespan for a few extra years so you cannot ignore the need for a digital-first strategy if you want realistic long-term expectations.
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Realistic profit levels are being achieved by those new leaner more focussed independent publishers who have sprung up in the wake of the car crash that the bigge regional publishers have become, they can provide a first class local news service supported by realistically priced advertising by controlling costs and staff numbers which the bigger publishers have lost control of, the same ones who are and have been off loading large numbers of staff just to try to make ends meet and who are sacrificing quality and credibility along the way, expecting high and unachievable profit levels to appease restless shareholders and failing to deliver has further hastened their decline.
The days of big profits due to high yielding advertising rates and an increasing number of people buying the papers are long gone and the sooner this fact is accepted and moved on from the better
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