Johnston Press half year results: Booming profits at the i newspaper but classified ad decline drags down group performance

Johnston Press has revealed a significant rise in profitability at i – the national newspaper it bought from Evgeny Levebev for £24m in April 2016.

Johnston said that i delivered profit of £3.7m in the first six months of the year (earnings before interest, tax, deductibles and amortisation) up 42 per cent year on year.

Circulation revenue for i increased from £4.4m to £11m and advertising revenue was said to be up from £0.8m to £3m in the period (this compares 26 weeks of i newspaper revenues in 2017 versus 12 weeks in the period to 2 July 2016).

The average daily circulation of i in June 2017 was 270,990, down 7.9 per cent year on year and including 58,366 free bulk copies.

Overall the regional press group announced a 3.1 per cent fall in revenue to £102.9m for the first six months of this year.

Adjusted pre-tax profit fell 31 per cent to £6.7m

Johnston Press runs 200 local newspaper titles across the UK including The Scotsman, Yorkshire Post and the Falkirk Herald.

Johnston said that overall digital advertising revenue grew by 14.8 per cent year on year “as demand for trusted, quality, targetable news increases”. This was in line with digital audience growth of 15 per cent to 26.5m unique users per month.

However a sharp decline in print advertising (driven mainly by falls in classified) meant overall advertising revenue fell 11.8 per cent to £52.5m.

The group’s net debt fell by £8.7m to £191.2m in the period. The debt pile cost Johnson £15.2m in financing costs.

The group said in its results: “Encouragingly, whilst print advertising revenues will continue to decline, we are seeing the monetisation of our growing digital audience gain momentum which has seen digital display advertising up 25 per cent year on year across June and July.”

It said it expected the upward trend to continue for i as “advertisers seek out a quality, impartial, concise, daily national news provider”.

Johnston Press chief executive Ashley Highfield said: “This is a business which we have long believed needed to transform, but once done, could return to growth. Thus, since 2012 we have been making the necessary and at times painful changes to transform Johnston Press into a truly cross-platform business.

“Whilst trading remains challenging, the business has responded and, as a result of our substantial efforts and clear strategic focus, I am very pleased to announce that we have posted revenue growth in the business (excluding classifieds) of 4.6 per cent during the half.

“Digital revenues (excluding classifieds) have outweighed the declines of print advertising revenues, helped by an editorial focus that has resulted in digital audiences at a record high, and by a fantastic performance from the i newspaper which has achieved significantly enhanced performance during the sixteen months since acquisition.”

Read the Johnston Press financial results for the first half of 2017 in full.

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