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Johnston Press's results may not have set the world alight, but chief executive Tim Bowdler was keen to stress that the rate of advertising revenue decline has slowed. Indeed, UK print-based advertising, which sunk 9.2 per cent in the first six months of 2006, dipped by a relatively less dramatic 2.9 per cent in 2007's first half. More reassuringly, however, the group, which is in the process of expanding its digital presence, saw the completion of its 'newsroom of the future' roll-out achieved ahead of schedule.
Advertising
This helped boost digital revenues, which rose 33.5 per cent in the period, while unique user numbers grew 31 per cent to 7.9m per month and page impressions jumped 40 per cent to 76.2m per month. And while Mr Bowdler said digital revenues grew from a small base, it helped to support overall advertising revenues, which declined by a modest 1.5 per cent. He also pointed out that total group advertising revenue actually rose 1 per cent in July.
Broker Numis Securities expects full-year adjusted pre-tax profits of £137m (£147m: 2006) and adjusted EPS of 34.7p (37p), rising to £148m and 37p, respectively, in 2008.
| JOHNSTON PRESS (JPR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 369p | MARKET VALUE: | £ 1,063m | |
| TOUCH: | 368-369p | 12-MONTH HIGH: | 500p | LOW: 336p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 228p* | NET DEBT: | 112% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2006 | 312 | 79.8 | 19.9 | 3.1 |
| 2007 | 313 | 67.5 | 25.4 | 3.3 |
| % change | - | -15 | +28 | +6 |
Ex-div:10 Oct Payment:02 Nov *Includes intangible assets of £1.5bn, or 518p per share |
||||
The improving advertising trend is welcome, but risks remain over the impact of interest rate hikes. Digital growth is impressive but remains relatively embryonic and requires additional investment. The shares, trading on under 11 times full-year forecast earnings, are not demandingly rated. Longer-term good value.
Last IC view: Fairly priced, 433p, 16 March 2007
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-IC-1.6.1b-prod - 17/12/2008 12:46:12 - jonathan.furseftb
