Johnston Press full-year revenue dips but contract printing sales up

By Richard Stuart-Turner, Thursday 01 February 2018

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Johnston Press has issued a trading update for the 52 weeks to 30 December 2017, reporting a 5% drop in revenue from continuing operations but contract printing revenue growth of 4%.

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Johnston Press said its newspaper circulation revenue from continuing operations grew by 2% year-on-year

In the full-year update issued today (1 February), the group said its newspaper circulation revenue from continuing operations grew by 2% year-on-year – benefiting from the full-year effect of the i newspaper, which it acquired in 2016.

But its total publishing revenues, which include both advertising and circulation, were down 6% year-on-year, or 13% when excluding i.

The company partly attributed its contract printing revenue growth to winning new printing contracts, including the Daily Mail and Metro, which it said outweighed circulation decline in some existing contract print titles.

The i reportedly achieved 20% market share of the 'quality' weekday market in the period. Circulation revenue for the title was up by 19% and advertising was up 26% in the second half, on a like-for-like basis.

Furthermore, the relaunch of the weekend edition in September 2017 saw an average increase in circulation in the three months post relaunch of 9,000 copies, to 272,000. Digital audiences for the title averaged over 1.4 million unique browsers per month, up 45% year-on-year.

In December, the group revealed EBITDA for i averaged £1m a month for each of the prior three months, marking the first time the title had traded at this level since it was bought by the group.

Digital revenue from continuing operations, excluding classified categories, was up 14% for the full-year, while digital revenue including classified categories was up 3%.

The group said digital audience growth remains a strategic priority, and the number of unique users grew to an average of 25.4 million unique browsers per month, a 13% increase on last year, with 108 million average page views per month, up 19% on 2016.

Subject to audit, the board said its adjusted EBITDA is in line with expectations.

The group is currently in the midst of a strategic review, launched last March, to find a solution to the repayment of £220m in high-yield bonds, which mature in June 2019. In the trading update, the group said “there can be no certainty that a formal proposal will be forthcoming” in relation to this situation.

The statement said: “[After the strategic review was commenced] the board subsequently announced that it was approaching its largest bondholders regarding the formation of an ad hoc committee of bondholders, which was formed in October.

“Discussions with advisers to the ad hoc committee are in progress. Any proposal that results from these discussions will remain subject to negotiation and the consent of relevant stakeholders.”

Speaking generally about the trading update, Johnston Press chief executive Ashley Highfield said: “We remained focused on delivering the priorities outlined to shareholders, amidst an extremely challenging trading environment.

“The i has delivered a very strong performance in our first full year of ownership. A slowing down of top line decline is encouraging while further growth in our audiences and digital revenues, underpinned by additional cost reduction, enabled us to maintain profit margins.”

“In 2018, alongside our strategic review of financing options, we will continue to invest in the business, including recruiting 32 journalists funded by the BBC, and a further 21 editorial staff and 10 specialist digital sales staff as we seek to accelerate digital growth further while reinforcing our offering of quality, trusted content across all platforms.”

Johnston Press’ share price rose by 0.21p in early trading to 10.51p but had fallen back to 10.25p at the time of writing.

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