Regional newspaper group Newsquest is working on “vigorously reducing costs” after it suffered a sharp decline in property advertising, parent company Gannett has warned.
In a presentation in New York yesterday, the Gannett executive vice-president Gracia Martore told investors that worsening economic conditions had caused advertising revenues at Newsquest to fall “significantly” in May.
She added that the difficult conditions at Newsquest would have an impact on Gannett’s overall business performance, forecasting a fall in operating profits this year.
Speaking at the Deutsche Bank media conference, Martore said: “The management team at Newsquest has been vigorously reducing costs – an action that is a bit challenging, given inflation rates in the UK.
“We are pleased with the progress we are making, but the economic environment is very difficult and advertising demand is challenging. We continue to work very diligently to find efficiencies.”
Martore said declining house prices and a fall in the number of mortgage approvals indicated that the property advertising market would remain challenging in the coming months.
But she pointed to strong growth in online revenues at Newsquest, which she said were up 25 per cent in May.
The Gannett chief executive, Craig Dubow, said: “We understand the difficult econominc waters that we must navigate. Nevertheless we are positive about our ability to grow once the current economic dowturn subsides.”