Johnston Press report 25.7% drop in profits

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by a Newsnet reporter

Johnston Press, owners of the Scotsman and Scotland on Sunday as well as many regional and local papers, has reported a drop in profits of 25.7% over the last six months.  Losses in Scotland and the north of England were reportedly greater than those in further south in England, while the company said in a statement that the market in the Republic of Ireland continued to be “challenging”.  In Ireland the company’s revenues from print advertising were down 18.2% on the same period last year.

However the company was still maintaining a respectable profit margin of 17.4%, compared to 19.5% in 2010.  This has been due to a large reduction in the company’s costs, down 5% from £166.8m in the second half of 2010 to £158.5m in the first six months of this year.  The cost reduction has been achieved largely at the expense of employment, as the number of posts at the company were axed from 5,228 at the start of year to 5,049 now, a loss of 179 full-time jobs.  The company also closed down a number of its free titles.  Johnston Press have not ruled out more job losses in the future.

The company is also struggling with a huge debt burden, although there was a glimmer of good news in the recent figures which saw a reduction in its total debt by £16m to £370.7 million.

Johnston Press is the second largest publisher of local newspapers in the UK, and as well as their flagship national titles also publish the Edinburgh Evening News, the Falkirk Herald and many other local Scottish newspapers.  The company also publishes local newspapers in northern England, Ireland and the Isle of Man.     

In July it was announced that Ashley Highfield, formerly the BBC’s director of online content, and latterly a senior executive with Microsoft, has been appointed as the new chief executive of Johnston Press.  Mr Highfield has reportedly been given a £500,000 “golden hello” share package.

Mr Highfield will replace John Fry as chief executive.  Mr Fry announced in March this year that he would stand down after Johnston Press saw its share price fall 20%.  Mr Highfield is expected to take up the position in October.  It is believed within the industry that Johnston Press expects to draw upon Mr Highfield’s experience in the digital media in order to transform the company’s fortunes.