The UK's second largest regional newspaper publisher, Johnston Press, yesterday blamed rising unemployment and consolidation in the car dealer industry for a further decline in advertising spending.
The company added that it has seen "no discernible improvement" in the market since March as it reported a fall in like-for-like revenues of 9.4 per cent in the five months to 3 June.
The group, which last year moved into national publishing for the first time through the £160m purchase of Scotsman Publishing from the Barclay brothers, alerted the market to declining advertising revenues in March.
Yesterday's figures from Johnston showed a slight improvement on the first five weeks of the year, when advertising revenues fell by 10.5 per cent, although advertising revenue in recruitment has fallen by 23 per cent and in motor sales by 16 per cent.
Despite the bad news on advertising, circulation revenue from the group's 300 titles was ahead of last year, with cover prices compensating for slowing sales. Tim Bowdler, the chief executive, said that the company expects to maintain profitability, although he added that there would be no job losses among the group's 9,000 employees.
He said: "Local authorities and private businesses are not filling vacancies at the moment but this is clearly a cyclical decline in recruitment advertising. We are seeing very little migration to other forms of media and we are very pleased with the integration of our new titles. We expect all of them to be earnings enhancing this year."
Lorna Tilbian, an analyst at Numis Securities, said that the decline in advertising revenues was worse than expected and now expects the group to report a full-year fall of 6 per cent and a decline in group earnings of 4.5 per cent.
In a note to clients she also noted that the newly acquired businesses, including 38 local newspapers in Ireland, are performing better than the rest of the group. The continuing uncertainty over consumer activity in the UK economy is likely to prevent the shares from outperforming the market in the near term.
The shares closed at 427.25p, a fall of 15p.Reuse content