Johnston Press has reported an ad revenue decline 5.4% in the 18 weeks to 6 November, as declining public sector and recruitment advertising led to a “slightly worse” performance than management expected.
The publisher said that while property advertising continued to show growth, recruitment ads continued to slump with a 29% year-on-year fall for the period. The company said that within the recruitment market public sector ads had fallen by 46% in the three months to the end of September.
“We are seeing public sector across the board – recruitment, COI [central office of information], public notices – declining from rates seen previously,” said the Johnston Press chief financial officer, Stuart Paterson. “I think if you look particularly at the third quarter the level dropped so significantly it is difficult to see another material change in it … it is down near base levels. You can only lose it once”.
Johnston Press, owner of the Scotsman and Yorkshire Evening Post, said that if the recruitment sector is stripped out the decline in print ad revenues was just 2.5% year-on-year for the period.
Other advertising categories “continue to show reduced rates of decline or growth in some of our geographic divisions”.
The publisher said that public sector advertising, which accounts for 9% of total advertising, has been “particularly difficult” in the past 18 weeks with the declines “sufficient to slow the overall rate of improvement in advertising performance”.
Paterson said that the declines in public sector advertising meant that the publisher did not expect to see any return to growth this year.
He added that rising printing costs was likely to lead to the raising of cover prices across its portfolio of titles. “Historically we have a date where prices change [for each title],” he said.
Digital advertising has continued to grow, although no performance figures were provided.
Johnston Press said that it expects to make in excess of £20m in savings this year. In order to reduce costs in the Republic of Ireland it is closing a printing operation in Limerick, resulting in an exceptional cost of £5m.
“Despite the decline in total advertising revenues being slightly worse than previously anticipated, this has been largely offset by increased cost savings and therefore it is expected that the outcome for the year will be satisfactory,” the company said.
Net debt fell to £388m at the end of October.
This article originally appeared in MediaGuardian.