Regional newspaper publisher Johnston Press has reported a slightly improved circulation and advertising revenue performance in the 18 weeks to 5 November, although both are still in decline, with local retailers snapping up display ads to entice belt-tightening consumers to spend.
Johnston Press reported that total print and digital ad revenues fell 8% in the period, an improvement over the 10% decline reported in the half-year to 2 July.
Circulation revenues across its titles, which include the Scotsman and Yorkshire Post, fell 1.6% – an improvement over the 1.8% fall in the first half.
The publisher said that display advertising, the group’s largest revenue category, continued to perform “relatively well” in a difficult market.
In the 18-week period, display ad sales fell 3.4% – in line with the decline seen in the first half.
“This category is being driven by local display revenues, as local retailers prioritise advertising to encourage consumer spending,” the company said.
Digital revenue grew 4.4% in the period, and has been in growth since May.
Johnston Press said that it is likely to exceed £20m in cost savings this year – the company cut almost 180 staff in its first half year – with net debt at £357m.
The publisher has started discussions with lenders to refinance its loans.
Analysts at Citi said that the update was an “in line statement all-round” – the expectation on full year pre-tax profits ranges between £24.6m and £27.4m – but raised concerns over the unsustainable business model at Johnston Press.
“Ad trends are exactly as expected,” said Citi. “Expectations for the year unchanged. Debt reduction is slightly better than expected and refinancing negotiations have begun. This should drive some comfort today. That said, we do not see this statement as a catalyst for sustainable performance. JP is still largely a pure-play regional publisher, with severe structural challenges.”
This article originally appeared in MediaGuardian.