Johnston Press pre-tax profit drops by almost a third

Johnston Press recorded a year-on-year drop in adjusted pre-tax profit of almost a third last year, the regional newspaper publisher reported this morning.

The company said pre-tax profit for 2010 fell 29.6 per cent year on year to £30.5m from the £43.3m it made in the previous 12 months – overall revenue dropped six per cent to £398.1m last year.

Johnston Press said the revenue slump was reduced significantly by operating costs being cut by £30.1m during the 12-month period, which included reducing headcount by 9.2 per cent to 6,209 employees. That’s a reduction of more than 600 staff.

Full-year financial results were reported today as Johnston Press also announced that chief executive John Fry would step down from his post by next March. He has been in post for little over two years.

The company said that print advertising revenue declined 7.1 per cent in 2010 to £235.8m and like-for-like circulation revenue dropped 2.8 per cent to £96.7m.

Overall ad revenue declined 6.4 per cent to £134.2m in 2010, with a drop of 5.7 per cent in the UK and 19.1 per cent in Ireland.

Of this, employment advertising dropped 19.7 per cent year on year, motoring was down 7.8 per cent, other classifieds ads dropped 7.5 per cent and display dropped 5.7 per cent. Property classified ads grew 5.2 per cent year on year.

Johnston Press said ad revenue had worsened in the first nine weeks of 2011 as it dropped 11.4 per cent.

Despite falls in pre-tax profit and revenue, Johnston Press said underlying operating profit rose for the first time since 2004 as it climbed 3.9 per cent year on year to £72m.

Johnston Press was forced to refinance is debt facility of £485m, in August 2009, albeit at a greatly increased cost of borrowing.

The company said that the cost of borrowing rocketed last year, as financial costs totalled £41.9m – a ‘very significant increase’from financing costs of £28.8m the previous year, Johnston Press said.

Despite the significant increase in finance costs Johnston Press said net debt was reduced by £35.4m to £386.7m over the course of 2010 and that its short-term priority remained debt reduction. No dividend payment was proposed.

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