Johnston suffers general election hangover but sees return to growth
Thursday 13 May 2010
Johnston Press yesterday blamed the "general election effect" for advertising revenues failing to improve in April, but the group is expected to return to growth in the summer.
The regional publisher, which owns The Scotsman and the Yorkshire Post, yesterday said its advertising revenues were down 7.1 per cent in the 18 weeks to 8 May over the previous year.
"Advertising over the first quarter was fairly stable," it said in its interim management statement, before adding: "However, performance in April was a little more subdued, primarily due to the general election."
The company said that the election hangover is expected to further drag on revenues throughout May and June, "and therefore we do not see any significant improvement in the current trend until the third quarter of 2010".
The publisher predicted that advertising revenues could return to growth in the third quarter; the first time since 2006. This backs up the group's expectation that full-year results will be in line with market expectations, despite the second-quarter decline in ad revenues.
Johnston, which is headed by John Fry, has increased its cost-cutting programme, up from £10m to £15m this year over 2009. While no titles are expected to close, the company warned that efficiencies would be partly generated through job cuts.
The company also backed its rise in digital revenues, which were up 12.3 per cent year-on-year. Revenues from recruitment advertising have struggled, but the decline has been offset by growth in property advertising.
Mr Fry has called 2010 "a year of learning" as Johnston has tested different ways of delivering content, such as online charging and an iPhone app.
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