Ad revenues slump at Johnston Press

Advertising revenues at the regional newspaper publisher Johnston Press fell 8 per cent last year and it warned that any real recovery in ad spend was dependent on an economic rebound.

Reporting results for 2006, the company, which publishes The Scotsman, said there was an improving trend in advertising sales. In the second half of last year, the decline was 6.8 per cent, with a 2.9 per cent decrease so far in 2007. But Johnston said this was largely the result of easier comparative periods and it was not possible to call the end of the two-year-old downturn.

Tim Bowdler, its chief executive, said: "The trends are encouraging but we are in a business that has no order book. I don't make predictions when the direction is not absolutely clear... To see any real growth, we need some help from the economy."

But Mr Bowdler was emphatic that the industry's advertising problems were not due to any "structural" change that would see marketing expenditure going to the internet instead. The issue was the state of the economy and the jobs market in particular, he said.

Johnston's advertising falls last year were driven by a 17 per cent drop in recruitment ads, while motors fell 15 per cent. Display ads were down 8 per cent. Mr Bowdler said this was due to the drying up of public sector recruitment, falling new car sales and weak consumer confidence, which had put retailers off advertising.

Group revenues grew 16 per cent, after acquisitions, to £602.2m in 2006. Pre-tax profits were down 6 per cent at £146.7m. The company said it did not expect to grow revenues in 2007.

To counter the downturn, Johnston launched 150 new publications last year and it now operates 317 websites of its own. Digital revenues were up 36 per cent last year at £11.3m.

"We believe fundamentally in the outlook for community media companies who get it right, who have a genuinely multi-media offering," Mr Bowdler said.