Johnston Press has announced pre-tax profits down by 47.4% in its interim results for the 26 weeks ended 2 July 2011.
Total revenue was down 7.5% to £191.8m and total advertising revenues fell by 10.0% year on year, with employment revenues continuing to contribute most to the decline in print and digital, but offset by growth in national display advertising.
Operating profits after non-recurring items fell by 25.7% to 32.6m.
The company said digital revenues were down 5.0%, but with an improving trend from -9.7% in Q1 to -1.5% year on year in Q2, reflecting the benefit of the successful launch of the Find it business directory in March 2011
Total costs for the first 26 weeks of 2010 were reduced by £8.3m compared with the same period in 2010, despite a £4.2m impact of newsprint prices.
Operating margin were 17.4% compared to 19.5% last year.
Commenting on the results, John Fry, chief executive officer of Johnston Press, said: “The Group achieved an operating profit before non-recurring items of £33.3m despite the challenging UK economic environment of the first half of 2011, down 17.6% on the first half of 2010.
"This was achieved by tight operational control, with further cost reductions of £8.3m resulting from new processes and an increased centralisation of back office functions. Operating cash flow within the Group remains strong, with a further debt reduction of £16.0m achieved in the first half of 2011.
"We remain cautious about the advertising outlook for the second half of the year, with total advertising revenues in the first seven weeks down 8.1%. Digital revenues, which returned to year-on-year growth in May, have continued to grow in the second half with the first seven weeks up 6.8% compared to the same period in 2010.
"We are also delighted to be able to announce the new digital partnerships with Zoopla and Nimble which will enable a significant enhancement of our property website and the launch of a new online vouchers business in the autumn. The Board has confidence that, in the absence of a further significant deterioration in the UK economy, the outcome for the Group in 2011 will be broadly in line with current expectations.”
I am a freelance journalist based in the UK and was deputy editor of Press Gazette, the journalists' magazine, from 1993 until 2006. I want to give an independent view on media matters.
You can contact me with stories, ideas and comments by email at email@example.com You can also follow me on Twitter @jonslattery