Operating profit cheer for Johnston Press, in latest financial results

THE publisher of The Scotsman newspaper and several local newspapers in Scotland has registered an increased operating profit against cost savings of £24.3 million.

Johnston Press – in its half-year interim financial results, published this morning – revealed its operating profit was up 4.3 per cent, to £28.6 million (“before non-recurring and IAS 21/39 items” and after adjusting for a cancellation of a print contract from News International, which involved receiving £10 million compensation).

It says: “Like-for-like operating profit for the six months increased by 4.3 per cent from £27.4 million to £28.6 million, the first increase in like-for-like operating profit for seven years.”

Among the other figures revealed today:

* Total revenue of £144.3 million, down 9.8 per cent (“after adjusting for NI contract exit and D2W change”) with digital advertising growing 13.3 per cent;

* Total advertising revenue down 13.6 per cent, year-on-year, narrowing to single-digit declines of 6.3 per cent in June and July (excluding revenues for five titles that changed format from daily to weekly);

* Newspaper sales revenues decline reduced to 0.7 per cent, year-on-year (excluding titles affected by the planned change in publishing frequency of five daily to weekly titles);

* Operating margin increase to 19.1 per cent, up from 17.3 per cent in 2012;

* Cost savings of £24.3 million, year-on-year;

* Net debt reduced to £306.4 million, a reduction of £55.3 million since June 2012; and

* Pension deficit reduced by £21.9 million.

The figures relate to the 26 weeks up to the end of June. They are contained in a fascinating ‘infographic’, here.

The results statement quotes chief executive, Ashley Highfield, as saying: “Johnston Press has continued to make good progress during the first half in the implementation of its strategy for growth, completing the re-launch of its print titles and investing further in technology to build its digital platform whilst maintaining a tight control on costs. It is encouraging to see the benefits of our actions starting to come through, with the Group achieving its first like for like operating profit increase in seven years.

“Although the economic outlook is not without challenges, momentum has continued into the second half, underpinned by the re-structuring and re-focusing of the business, an increasingly stable advertising market and growth in circulation and digital revenues. This has enabled us to report like for like operating profit up 4.3 per cent, digital revenues up 13.3 per cent and net debt down 15.3 per cent, with total advertising decline rate narrowing to 6.3 per cent during June and July 2013.

“We remain focused on adapting our business to the changing environment in which we operate and reaching the point where digital growth will offset any further decline so that we can return to overall top line growth.

“In view of this operational progress, we expect the results for 2013 to be broadly in line with current market expectations.”