Johnston Press, the regional newspaper publisher focused on the north of England and Scotland, has seen advertising revenues plunge 8 per cent at its titles in the past five months.
The company, which includes the Yorkshire Post and The Scotsman among its titles, warned there was no evidence of any upcoming improvement in advertising sales. Johnston shares dropped 8 per cent to 391p. Analysts at Numis Securities pointed out that costs were also rising and cut its 2007 profit forecast for Johnston by 11 per cent to £138m.
Johnston's trading update, covering the five months to the end of November, was significantly more gloomy than an announcement last month from rival Daily Mail & General Trust, which owns a major regional publisher, Northcliffe. Tim Bowdler, Johnston's chief executive, said that, compared with DMGT, his company's papers were based more in the north of England and Scotland.
"The South went into decline before the North, which held up better [initially]. Now the South may be recovering first," Mr Bowdler said.
Regional newspaper publishing is reliant on classified advertising - especially for jobs, property and cars. Mr Bowdler said the only positive factor was that the rate of decline in ad sales was easing but this was because the comparatives were getting easier. Recruitment advertising revenues were down 12 per cent in the five months to 30 November, but this was an improvement on the 24 per cent fall seen in the preceding six months.
"We are not being optimistic. This is a realistic assessment of the market today. We see nothing to base any real confidence on that an upturn is imminent," Mr Bowdler said.
He insisted the trading problems were "predominantly" cyclical, stemming from rising unemployment and the changing nature of recruitment as more jobs are filled by immigrants,who are more often hired through agencies than newspaper adverts. Mr Bowdler also said public sector recruitment had dried up and new car sales were down, for the second year in a row.Reuse content