Since the start of 2012, management at regional newspaper publisher Johnston Press (JPR) has been working to turn the business around - those efforts are now beginning to stem circulation falls, improve advertising sales and reduce costs. Chief executive Ashley Highfield says he's "definitely seeing more than just green shoots", adding that "demand is there, it is just shifting from print to a mix of print, online and mobile",
Indeed, and for the first time in seven years, Johnston's underlying like-for-like operating profit improved - it rose 4.3 per cent to £28.6m. That was despite a 9.8 per cent like-for-like sales fall to £144.3m, which reflected a 13.6 per cent decline in advertising sales. The good news here, though, was that the run rate for advertising sales improved, from a 17.6 per cent decline in January to a 6.3 per cent fall in June and July. Digital revenue grew 13.3 per cent, too, and better editorial content boosted newspaper sales, which slipped just 0.7 per cent to £42.8m.
However, the debt pile remains heavy and, reflecting the buy-out of the News International print contracts, the group is operating closer to its financial covenants than was originally intended.
Broker Numis Securities expects full-year pre-tax profit of £20m, giving EPS of 2.4p (from £12.6m and 1.5p in 2012).
| JOHNSTON PRESS (JPR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 16.5p | MARKET VALUE: | £110m | |
| TOUCH: | 16-16.5p | 12-MONTH HIGH: | 19.5p | LOW: 5p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 16p* | NET DEBT: | 294% | |
| Half-year to 29 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 206 | 13.6 | 2.34 | nil |
| 2013 | 160 | -249 | -29.8 | nil |
| % change | -22 | - | - | - |
*Includes intangible assets of £549m, or 82p a share | ||||
