Restructuring costs and impairment of assets including a £202m write-down in the value of its publishing titles and a £68m write down in the value of its print facilities resulted in a statutory pre-tax operating loss of £246m (2012 profit: £40m).
However, excluding exceptional charges the company actually posted a 2.5% increase in underlying operating profit – its first for seven years – to £54.3m (2012: £53m).
Chief executive Ashley Highfield said: “We are delighted to see a return to underlying operating profit growth for the first time in seven years. Having delivered EBITDA of £62.7m in 2013, January and February has seen an 8% increase in EBITDA year on year. Our digital growth remains strong, with significantly increasing audiences coming to our websites in 2013 and into 2014.”
During the period revenues fell 15.6% to £303m (2012: £359m) including an exceptional £10m charge resulting from the termination of its contract printing agreement with News International.
In January the company announced that it had reset its financial covenants through to September 2015 with the expected refinancing of its debt facilities during 2014, for which it is exploring a range of options including a potential equity fundraising.
Meanwhile, cost cutting measures, which have resulted in the closure of Johnston’s Peterborough, Leeds and Sunderland press facilities and around 1,600 staff in the last two years, saw headcount decrease in 2013 by 13% to 4,188, including part-time staff positions.
Print advertising revenue declined 13.3% to £157m (2012: £181m) while digital revenues increased by 19.4% to £24.6m (2012: £20.6m).
Overall advertising revenue was down 10% on the previous year to £182m.
“Along with slowing declines in print advertising revenues, and a stable circulation revenue decline rate, these are clear indications of good progress during the year in the implementation of our strategy for growth." Highfield said the group was “well positioned” to make further progress in 2014.
The increase in digital revenue and a nearly 50% year-on-year growth in its digital audience in December 2013, and January and February 2014 are evidence that Johnston’s internal restructure, the relaunch of its newspaper titles and its digital-first strategy are beginning to have a positive impact for the publisher.
“Last year, I stated that we remain exceptionally well placed to serve the demand for information about the communities in which people work and live. That remains the case but the way we do this is changing and the growth in our digital audiences continues to reflect this,” stated Highfield.
He cited two initiatives in Harrogate and Bourne where editorial content is reader-driven. “Early results are both encouraging and exciting and in the case of Bourne our audience across print and on-line has grown by over 150%.
“The demand from advertisers to reach those communities in a targeted and cost-effective manner also grows. We are on a clear journey to become the ‘one-stop-shop’ for advertisers and readers across all media in the communities we serve,” he added.
Johnston Press share price was down 4% at 23p at the time of writing (52 week high/low: 30.67p/12.25p).