Johnston Press shows signs of a turnaround after bumpy start to year
Regional publisher Johnston Press, which recently bought the i newspaper, today said it expects its full-year results to be in line with expectations despite a challenging first quarter.
In its trading update for 3 January 2016 to 30 April 2016, group revenue fell by 13.7 per cent, hit by a 16.9 per cent decline in advertising revenues over the period.
However, April saw the start of a turnaround, with an improved overall rate of decline and a 4.5 per cent rise in digital revenues, compared to a 5.7 per cent drop in digital sales over the whole trading period.
Digital display and transaction revenues – which include those from 1XL, a digital advertising platform set up in partnership with other local media publishers and Google ad word sales – rose 5.8 per cent in the first quarter and soared 15.6 per cent in April.
“The first quarter has seen a continued shift to higher quality revenues,” said Liberum analysts, who reiterated their “buy” recommendation on the stock.
Johnston Press said the i newspaper, which it bought from Evening Standard owner Evgeny Lebedev for £24m in February, saw a seven per cent rise in daily print sales last month to 297,849, while its newly-launched website reached 638,000 unique users in its first month.
Lebedev announced in February he would be shutting down the print versions of the Independent and the Independent on Sunday shortly after selling off their tabloid sister publication i.
Johnston Press said that following the completion of the i acquisition, it continues to explore the disposal of certain assets, in order to deleverage the balance sheet and reduce financing costs.
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“The integration of the i is on track and we would anticipate that there is considerable interest by various players for the assets on sale,” said Liberum.
Regional publishers have struggled in recent years, due to dwindling circulations and intense competition from the growing digital media sector. However, they were given a lifeline of sorts from last week’s BBC White Paper, which committed £8m annually to regional press to fund 150 journalists to cover council reporting. The BBC will also allow the regional press players to access its video library, text, and data content and will improve its linking to regional publications, which should drive more traffic to their sites.
“Johnston Press remains focused on increasing audiences, providing creative solutions for our advertisers, further cost reduction and integration and growth within the i,” said the firm.
"At this point, the board expects performance for the full year to be within the range of market expectation."
Shares were trading 1.3 per cent lower at 39p by noon.