Operating profit at regional newspaper publisher Johnston Press fell 25.7 per cent in the first six months of 2011 to £32.6m despite the company cutting costs by 5 per cent.
Turnover was down 7.5 per cent to £191.8m during the same period with advertising revenue down 10 per cent. Profit before tax was nearly halved – falling from £26.1m to £13.8m.
Losses in Scotland and the north of England were greater than in the South and Midlands, while the company said that the Republic of Ireland – where print advertising was down 18.2 pent cent – continued to be ‘challenging”.
Newspaper sales revenue dropped 1.8 per cent and circulation of paid-for newspapers fell by an average 7.8 per cent for dailies and 6.8 per cent for weeklies, the company said
Despite the drop in operating profit the company still had a profit margin of 17.4 per cent, compared with 19.5 per cent in 2010.
Costs for the first half of the year were down 5 per cent from £166.8m to £158.5m, with the number of full-time staff cut from 5,228 at the start of year to 5,049.
Digital revenue fell 5 per cent in the first six months but the company said that in the first seven weeks of the second half of 2011 it was up 6.8 per cent.
Johnston also announced two new digital partnerships with Zoopla and Nimble Commerce, for property and online vouchers respectively.
Zoopla is to replace Johnston’s in-house property websitevia a partership deal and ‘provide a much enhanced experience for our viewers and greater audience response for advertisers”. Zoopla said it would power a new classified property platform for all of Johnston’s 270 local websites.
Johnston said the Nimble partnership “takes the group into the rapidly growing vouchers market”.
Commenting on the group’s prospects for the second half of the year, chief executive John Fry said: ‘We remain cautious about the advertising outlook for the second half of the year, with total advertising revenues in the first seven weeks down 8.1per cent.
‘Digital revenues, which returned to year-on-year growth in May, have continued to grow in the second half with the first seven weeks up 6.8 per cent compared to the same period in 2010.”
He added: ‘The board has confidence that, in the absence of a further significant deterioration in the UK economy, the outcome for the group in 2011 will be broadly in line with current expectations.”
Fry leaves Johnston on 31 October when he will be replaced by the former editor-in-chief of BBC Online, Ashley Highfield.