Johnston Press may yet regret not selling its Irish newspapers for a firesale price last year. I say this because of what the company told investors last week about ad revenues at its division in the Republic.
During 2009 as a whole ad revenues at papers like the Leinster Leader and the Kilkenny People fell by a whopping 33% in local currency. Ad revenues at the company’s UK-based newspapers fell by 27%.
Yet as time goes on, the divergence between the UK and Ireland is looking more marked. During Q4, at Johnston Press’s Irish newspapers, print-based ad revenues declined by 21% YOY. During the first nine weeks of 2010, the decline was 23%.
In the UK, Q4 saw print ad revenues decline by 12%. During the first nine weeks of 2010, the decline was 7.6%.
‘The improvements in property and motors seen in the UK were not seen in the Republic of Ireland,’the Johnston Press told investors.
No — and they won’t be for quite some time. As it happens, I was in Ireland last week. The figures for GDP suggest that the Republic emerged from recession during Q309, earlier than the UK. But it doesn’t feel that way.
Public spending cuts have been savage, and there’s more to come. The unions are mutinous. In the private sector, wage cuts and longer hours are the norm. The Republic’s banks are still announcing billions of euros-worth of write-offs, mostly connected with property deals.
If George Osbourne and the Daily Telegraph are correct, Britons are living in a fools’ paradise. On this basis, perhaps Ireland offers a taste of things to come if (or when) public spending cuts kick in alongside an anaemic recovery in the UK.
Coincidentally, the outlook seems correspondingly bleak in Northern Ireland. Richard Ramsey, an economist with Ulster Bank, suggests that the private sector in Northern Ireland ‘continues to experience the most severe squeeze on profit margins of all the UK regions.”
Publishing newspapers is no fun in Britain. In Ireland, it remains a nightmare.