Johnston Press has more than doubled underlying profits in a declining market, but contract printing revenues remain flat, according to its latest results.
The Edinburgh-headquartered company reported a drop in underlying turnover for the first six months to 4 July of 4.6% to £128.9m. But underlying profit before tax increased 114.3% year on year to £17.8m from £8.3m, according to interim results released this week.
The company said it had benefitted from reduced interest costs following refinancing. It also made savings of £7.6m during the period.
It also benefitted from a drop in paper prices over the past 12 months, but in its report the company expressed concern about future price rises. After staff costs, newsprint is its largest single expense.
Johnston’s contract printing income, which represents about 7% of its turnover, remained the same as the first half of 2014 at £6.3m. However, this may change by year-end, following the start last month of a “multimillion-pound” five-year contract to print Express Newspapers’ four major print titles at its Dinnington site in Sheffield.
Print advertising revenue declined 9.5% in the period to £64.1m. It has also seen a drop in newspaper sales, to £37.6m, compared to £39.7 in the same period of 2014.
The average monthly audience, across both print and digital, for the period was up 8.7% year on year to 29.4m and audiences grew 3.4m, 20.4%, to 19.9m unique users a month, year on year.
Johnston grew its digital audience by over 20% to an average monthly audience of 19.9m the first half of 2015, leading to an increase of 17.5% in digital revenues, from £14.1m to £16.5m. Digital now represents 20.5% of its advertising revenue.
Chief executive Ashley Highfield said: “Trading conditions in the first half of 2015 have undoubtedly been challenging, with May and June being particularly difficult - a time when there was also a high degree of uncertainty in the wider market.
“However, we believe, local publishing, with SMEs representing 80% of our advertising revenue, is not as volatile as national publishing. We have seen some improvement in reducing the decline in advertising revenues in July compared to July 2014.
"We will continue to drive for further improvement in revenues, albeit off a lower base, and will also continue to target further cost savings.”
The company has 13 paid-for daily newspapers, including The Scotsman, 195 paid-for weekly newspapers, 40 free titles, 10 lifestyle magazines and 198 local news and e-commerce websites across England, Scotland and Northern Ireland.
Turnover for the 53 weeks to 3 January 2015 was £268.8m.