Scotsman publisher reports revenue drop but encouraging signs following relaunches

A RELAUNCHING plan of all but a handful of its newspaper titles appears to be paying off for the publisher of The Scotsman newspaper.

While an interim management statement issued this morning by Johnston Press has it revealing a 11.4 per cent decline in like-for-like, year-on-year revenue, there is a glimmer of hope regarding a phased relaunching of the group’s UK-wide newspaper portfolio.

While both The Scotsman and Scotland on Sunday are not part of the relaunch plans and the relaunching has yet to take place among the publisher’s portfolio of Scottish local newspapers, the statement says: “The second phase of the re-launch programme has been implemented and, while it is early days, we are seeing a positive impact on these titles with circulation revenues of the 31 paid-for titles re-launched in the second half up 19.5 per cent on the week immediately prior to re-launch and 13.8 per cent up year-on-year.”

Johnston Press is not the only newspaper publisher relaunching its local titles. Media Scotland – publisher of the Daily Record and local titles such as the Kilmarnock Standard – is doing likewise.

Says Johnston Press: “Market conditions in the first 18 weeks of the second half of 2012 were more challenging than in the first half with like-for-like total revenues down 11.4 per cent year-on-year although we are seeing some positive signs of a slowing in the rate of revenue decline in November.”

It later adds: “Extensive reshaping of the business has seen the level of cost savings increase and we now expect cost savings for the full year to be around £30million, a £5million increase on the previous estimate.”

And it also says: “Continuing focus on reducing net debt with repayment of borrowings ahead of schedule although the robust operating cash flow in the first 18 weeks of the second half has been offset by the cash cost of restructuring in the period.” Net debt has fallen from £351.7million at the start of the year to £336million as at the end of October.

The statement quotes chief executive, Ashley Highfield, as saying: “The second half of 2012 has seen acceleration in the implementation of the strategy for the business. While market conditions have been even tougher than expected, we have made good progress in restructuring our operations, reducing the cost base, maintaining focus on debt reduction and continuing to invest in growth areas.

“We have moved forward with the re-launch of our titles with encouraging early signs, and our digital business has seen a huge increase in audience this year, as well as the launch of services across iPad, mobile and PC, which will provide a spring-board to future digital revenue growth. As a result, the business is moving onto a more stable footing as we go into 2013 when the full benefits of the changes will be seen.”