Johnston Press records pretax loss of €6m after regional redundancies

REDUNDANCY COSTS totalling €4.1 million at Johnston Press Ireland Ltd resulted in the group recording a pretax loss of €6 million last year.

The group, which owns 12 regional newspapers in the Republic, recorded a pretax profit of €3.9 million in 2008. Accounts filed in the companies office for the year to January 2nd 2010, show the group’s revenues dropped 17 per cent from €36.9 million to €30.6 million.

The Scottish-owned group's titles include the Limerick Leader,the Kilkenny People,the Donegal Democrat, the Leinster Leader, the Longford Leaderand the Tallaght Echo.

Last year Johnston Press withdrew the sale of its Irish regional newspapers after failing to receive a sufficiently high bid – the group, which is heavily indebted, paid a reported €260 million to acquire the Irish titles over a four-year period.

In September of last year the group also closed its printing operation at Kilkenny with the loss of 46 jobs. The accounts show the group incurred an exceptional cost of €1.8 million relating to the writedown of its printing press at Kilkenny.

The group’s total exceptional costs last year totalled €5.9 million and the directors state before the exceptional items the group recorded a pretax loss of €20,000 last year.

The total €6 million pretax loss last year reduced the group’s accumulated profits to €25 million.

According to the directors’ report: “The recession in the Republic of Ireland continued in 2009, and this has significantly impacted revenues. Employment, property and motors were the most significantly affected categories due to high unemployment and low property and motor transactions.”

The report says to partly mitigate the falling advertising revenues and prepare for the economy’s eventual upturn, the company has reviewed its cost structure. This led to the closure of the Kilkenny print operation and a process of consolidating back-office functions is also under way.

It states: “2010 is expected to be another challenging year with revenues not expected to recover during 2010.”

However, the directors state that they “are satisfied with the future prospects of the company”.

Addressing the group’s “going concern” status, the directors say they “believe that the company is well placed to manage its business risks successfully despite the current uncertain economic outlook”.

They add: “The Johnston Press plc Group has recently renegotiated its financing facilities of which the company is a guarantor of. The group’s forecasts and projects, taking account of reasonably possible changes in trading performance, show that the group should be able to operate within the level of its current committed facilities.”

The accounts disclose that the group’s staff costs last year increased by 20 per cent from €15.4 million to €18.6 million. The group’s cost of sales last year reduced by 3 per cent from €23.3 million to €22.6 million.

Exceptional costs of €5.9 million increased the group’s administrative expenses to €12.5 million – an increase of 60 per cent on the €7.8 million incurred in administrative expenses in 2008. The group paid no dividend last year.