12/11/2008

A big drop in advertising revenue has hit the owners of The Scotsman newspaper, Johnston Press.

In an interim management statement published this morning, the company revealed that, for the first 44 weeks of this year, up to November 1, advertising revenue was down 15.5 per cent on the same period last year.

In comparison, the first six months of this year had seen a 9.5 per cent drop in advertising revenue compared to the same six months last year, the difference since - says the company - down to "further substantial declines in property advertising, combined with significant falls in employment and display advertising”.

The ‘credit crunch’ and a general slowdown in economic activity have been identified as the main reasons.

And the numbers are big: from summer to now (ie weeks 27-44) year-on-year ad revenue on property was down 48.4 per cent; on employment, down 32.1 per cent; on motors, down 24.3 per cent; and on display advertising, down 12.1 per cent.

One cheering figure over the 44 weeks was digital advertising: up 36.8 per cent.

Meanwhile, says Johnston, “newspaper sales revenues after 44 weeks are slightly down on last year, with circulations suffering from both the general economic conditions and a significant reduction in levels of interest in the property market”.

The impact will be more cost-cutting, £7.6 million-worth having already been carried out during the first half of this year. Johnston Press owns 18 daily newspapers and 300 weekly newspapers in the UK and Ireland.

Johnston’s share price finished at 19p yesterday. Twelve months ago, it was £2.52; two years ago, it was £4.20.

Also revealed in the interim management statement: net debt, as at the first of this month, was £465 million, a reduction of £19 million from the balance as at June 30 this year.

Adds the company: “Given the challenging and deteriorating economic and operating environment, the group is concentrating on managing its cost base and reducing its debt levels, but would still expect to deliver an operating profit for the full year at the lower end of current market expectations.”






* Send your Scottish media news and gossip, in the strictest confidence, to  info@allmediascotland.com