Irish revenues at Johnston Press down 19% in year

IRISH REVENUES at Johnston Press dipped by 19 per cent last year, falling to £11 million (€12.8 million) from £13.6 million a year earlier.

The regional newspaper publisher, which owns the Leinster Leaderand the Donegal Democrat, also signalled a worse start to 2011 than expected, after UK spending cuts hammered advertising revenue.

The group, whose UK titles include the Yorkshire Post, said total advertising for the first nine weeks of 2011 fell 11.4 per cent. The decline compared to a drop of 6.4 per cent for the whole of 2010.

In Ireland, 2010 revenues fell to £11 million from £13.6 million a year earlier on a constant currency basis, although the pace of decline moderated somewhat in the second half of the year, slowing to 15 per cent in the final six months.

“We also saw an improvement in the rate of decline in the Republic of Ireland but this is a result of the comparatives in 2009 being lower rather than any improvement in the economic conditions in that market,” the group said in a statement.

The company, which also owns the Limerick Leaderand Limerick Chronicle, last year shut down its printing press on Dock Road in Limerick, with the loss of 29 jobs.

Its accounts allow for a £9.2 million redundancy provision, which included costs relating to the Limerick closure and a £1.5 million provision for the remaining term of a lease in the city.

At group level, operating profit rose 3.9 per cent to £72 million, after the group cut total operating costs by £30.1 million, on revenue down 6 per cent to £398 million.

Weak trading at the company, together with chief executive John Fry’s decision to stand down by March 2012 and a forecast that the economic outlook for 2011 would remain uncertain, sent shares down more than 20 per cent.

Finance director Stuart Paterson said the UK advertising market had been poorer than expected. “Once the government got in, public sector recruitment really dropped,” he said. The UK government has cut its spending on advertising as part of an overall drive to cut its budget deficit.

Analysts at Numis said they had placed their target price for Johnston shares and their recommendation on the stock under review. "Given the lower base, weak start to 2011 and . . . cost pressure in newsprint we are downgrading our full-year 2011 pretax profit [forecast] from £40 million to £30 million," they said.– ( Additional reporting, Reuters)