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Revenue decline slows at publisher after national daily purchase

Highfield 1Regional publisher Johnston Press has unveiled its annual results for 2017, showing revenues declined at a slower rate than the previous year.

With the purchase of the i newspaper in April 2016 boosting both advertising and circulation revenues, overall adjusted revenues fell by 4.5pc in 2017 compared with 6pc the previous year.

The adjusted figures, showing overall annual revenues of £201.2m, take account of the sale of 13 weekly newspapers in East Anglia and the East Midlands to Iliffe Media in January 2017, which accounted for £9.9m in lost revenues.

Circulation revenue across the group rose by 2.7pc year-on-year, although it was down 4.9pc when the i is excluded from the comparison.

Adjusted digital revenues were up 13pc at £20m while average monthly unique users across the group’s online portfolio also rose by 13pc.

Operating costs at the group were reduced by £12.1m, contributing to a pre-tax profit of £14.2m.

Today’s report says the trading environment remains “challenging” and predicts continued pressure on revenues as well as the requirement for cost savings during 2018.

“Against this difficult backdrop we are focused on maintaining our strong margins, driving additional growth from i and realising further operational and financial synergies. During 2018 we will continue to selectively invest in the business, with a focus on digital, journalists, and content generation,” it stated.

Commenting on the results, chief executive Ashley Highfield, pictured, said: “Our vision remains constant – to be at the heart of our communities, providing accurate, relevant and timely news and information – free of proprietorial influence.

“And we continue to deliver on this, despite 2017 proving to be another tough year for the sector: We more than doubled profits at the i, with circulation revenue up 20pc and advertising revenue up 27pc.

“Across our regional portfolio of titles national print advertising tracked in line with prior year in the first quarter of 2018, with advertisers starting to increase spend in regional print.

“This trend is driven by a somewhat stronger overall advertising market, our ability to precisely target audiences using ‘big data’, and improving sentiment towards quality print publishers in the wake of the Fake News and social media trust concerns.

“Classified advertising remains weak, but is now a significantly smaller portion of the group accounting for just 13pc of revenues in the quarter, following our investment in digital and the i.

“Whilst operationally the business is performing well in challenging markets, addressing the Group’s capital structure remains a key priority. The Strategic Review of financing options is ongoing and discussions with our various stakeholders are progressing.  We will update on this matter as we progress through 2018.”

16 comments

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  • April 17, 2018 at 10:25 am
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    “…realising further operational and financial synergies…”
    “…as well as the requirement for cost savings during 2018”

    Both Highfield speak for a continuation of job cuts and further redundancies via centralisation,
    I also wonder if he believes:
    “…advertisers starting to increase spend in regional print”
    When the revenue figures show no evidence of this and he’d earlier said they’re looking to selectively invest in digital, journos and content, no mention of their regional print titles, unless he means uk wide regionals not JPs?

    Mixed messages and wishful thinking me thinks

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  • April 17, 2018 at 11:25 am
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    Positive spin on a serious situation. Revenues down again nearly 10pc. The I performance is clouding the desperate state of the other 200 papers. More cost-cutting needed when papers are already cut to the bone. We are now entering the digital-only publications era as that is how any savings of significance can be found.

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  • April 17, 2018 at 2:06 pm
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    In December I read that the i was making a profit of £1m a month.

    So this means the rest of JP is only making a profit of £2.2m, thats pretty bad!

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  • April 17, 2018 at 2:09 pm
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    Shareholders across all regional publishers will want to know what the board plannin doing about falling copy sales and rock bottom advertising revenues, not what they/we already know.
    Promises of jam tomorrow, green shoots and positive signs of increased revenues don’t pay the bills and are the go to excuses when further decline is on the cards. Yes costs need to be cut but the editorial sides cannot be pared down further, the cuts need to come from the higher levels, those directly responsible for revenues and as WYA says converting failing paid for paiers into digital only editions.
    It’s no longer acceptable to ignore poor performance and under performing staff, shareholders patience is rapidly running out frustrated through lack of action where it’s most needed

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  • April 17, 2018 at 2:55 pm
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    The key sentence in the report: As noted in the review of Liquidity and Going Concern, there is a material uncertainty surrounding the Group’s ability to refinance the Bonds, which are repayable in full on 1 June 2019 and are not subject to any financial maintenance covenants, at par in the market on commercially acceptable terms. Failure to repay, refinance, satisfy or otherwise retire the Bonds at their maturity would give rise to a default under the indenture governing the bonds dated 16 May 2014, and this possibility indicates a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern and if the Strategic Review does not deliver a solution for the Group it may be unable to realise its assets and discharge its liabilities in the normal course of business.

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  • April 17, 2018 at 3:23 pm
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    Despite his meanderings about money hats off to the poor souls left in the local papers who are doing their best to keep things afloat. The decline in standards is there for all to see, but those who are left in the lifeboats are working pretty hard to keep things afloat. Well done to them all and I could not give a fig for Highfield.

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  • April 17, 2018 at 3:41 pm
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    Ashley speak and spin! On one hand he is hailing digital and then he’s says advertisers are shying away from digital because they are “afraid of their ads ending up on Al Queda websites”. Well I’ve heard it all now. Jihadists are to blame for digital not working. (Check it out on News Now/Johnston Press). NOT JOKING. Then he says print is recovering citing the i. Well Ashley make your mind up! Apply the same formula as the i to all your local weeklies which have had their life-support systems switched off. If you’re not interested then sell them off at £1 each to small local firms who can do the job properly. Don’t sack anymore talented staff.

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  • April 17, 2018 at 3:50 pm
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    Canary: struggling staff at JP weeklies are OT under performing. The JP staff who are under performing are in the boardroom. I know as much about brain surgery as these clowns know about newspapers. And as for the shareholders, most overworked, stressed out and under-resourced remain staff don’t give a damn about them. They worry about their jobs and the fling quality of their products due to cuts and more cuts.

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  • April 17, 2018 at 3:57 pm
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    Ashley REALLY said it!! In the Telegraph…..
    Ashley Highfield, chief executive, said the improvement reflected a broader recovery in the advertising market as well as rising scepticism about the value of automated online advertisements.

    He said: “Clients are worried their adverts are going to appear on Al Qaeda websites, clients are pushing their media buying agencies to show where were the adverts seen, were they seen by humans?

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  • April 17, 2018 at 4:08 pm
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    Look at the god awful advertising revenue and pitiful digital revenue then, like it or not, tell me the commercial staff at JP are not under performing @Dead Digital Horse the editorial staff cannot drive revenues, the commercial chiefs and heads can snd shotld, it’s their job, their responsibility.
    As for shareholders they hold the key so your deluded if you think they don’t matter, they’re the ones who can demand answers and action by the board not the JP staff, ranting about digital is pointless , we all know it’s not a practical sustainable business model or revenue driver but the more business minded shareholders will see through it and ask questions and demand action and clearly that time is now,

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  • April 17, 2018 at 4:45 pm
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    Canary: I fully accept that there may be under performing Ad staff, there always has been. I was more concerned with editorial staff who are being crucified by cuts, curd and more cuts. Although I must say, the management make it difficult for ad staff to sell ads for a product that is a pale shadow of its former self. Cutting staff, ditching photographers, closing town centre offices, imposing unsuitable templates and using more and more UGC, especially photos and filling weeklies wot ‘generic company wide’ junk pages just lowers the quality of papers so much that ad staff are struggling to sell ad space. This drop in quality comes from board room policy. What company has ever survived by drastically lowering the quality of their product. And upping the price. Its not rocket science. Imagine if Mars bars were halved in size, made with cheap ingredients and priced at £1.50. What would happen? As for the shareholders. So far they have done NOTHING at all to call out the board. Only the Scandanavian guy, Agger Hanson has tried but the board seem unabletouchable. Most remaining staff would rather not be part of JP. Not playing second fiddle to their debts and shareholders.

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  • April 17, 2018 at 5:27 pm
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    Read people’s comments and posts on here before ranting @deaddigitalhorse, YOU mentioned JP editorial staff,not me,I made the opposite point “…the editorial sides cannot be pared down further, the cuts need to come from the higher levels …..”

    the cuts need to come from the appropriate departments, not always the editorial and photographic departments who are not in a direct position to influence revenues.

    I can’t make it any clearer than that for you

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  • April 18, 2018 at 8:42 am
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    Imagine the already zombie company if it hadn’t acquired the i paper.

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  • April 18, 2018 at 9:44 am
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    @MediaPundit, I agree
    Strip out the ipaper figures or show it as a separate entity and a much clearer picture of the true state of the business emerges

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  • April 18, 2018 at 10:11 am
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    advertisers know that some weeklies have seen sales slump from peaks of about 20,000 to less than 5,000, so they do not reach nearly as many people with print. The debate over digital and real income continues.

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  • April 18, 2018 at 3:22 pm
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    @Canary
    you say cuts need to come from other areas, I take it you mean commercial?
    The advertising departments have been decimated in the past 12 months with redundancies, probably around half of staff gone, with many services now centralised so less and less customer interaction.
    The senior commercial management in the company have pursued poor thinking for years, no doubt driven from above. I don’t think the board care where the cuts come from, they believe people will pay more for less with the papers, and advertisers don’t really need servicing and response is a dirty word.
    bad decisions for years mean that the products are virtually beyond saving, editorially and commercially

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