First-half figures from Johnston Press (JPR) may look dismal, but strip out restructuring and impairment charges and its operating profit climbed 3.6 per cent to £28.3m. Moreover, the publisher of the Banbury Guardian and Norfolk Citizen raised a total of £365m via a bond issue, a placing and rights issue, enabling it to slash net debt by 40 per cent to £182m.
Johnston made some progress towards stemming its top-line declines with digital gains. Group underlying sales fell 4.3 per cent, compared to 5.3 per cent a year ago. Meanwhile, it grew its digital audience by 39 per cent to almost 16m, with mobile visitors to its news sites increasing more than four-fifths and making up almost half of digital traffic. That helped Johnston’s digital revenues climb more than a fifth to £14m or about 17 per cent of its total advertising revenues, reflecting strong demand from property and motoring advertisers.
Investors are likely to cheer the group’s debt reduction, which will lower its annual interest payments by roughly 45 per cent to £20m. Johnston also sold its Irish business, comprising 12 titles. And management says it is starting to see the economic recovery in England's South East spread to other regions.
Broker Panmure Gordon sees “solid progress across the board” and expects pre-tax profits of £26.5m, giving EPS of 0.6p, up from £13.9m and 0.8p last year.
| JOHNSTON PRESS (JPR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 4.15p | MARKET VALUE: | £ 220m | |
| TOUCH: | 4.15-4.16p | 12-MONTH HIGH: | 8.8p | LOW: 3.5p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 4p* | NET DEBT: | 84% | |
| Half-year to 28 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 (restated) | 153 | -254 | -20.4 | nil |
| 2014 | 136 | -6.3 | -0.1 | nil |
| % change | -11 | - | - | - |
*Includes intangible assets of £537m, or 10p a share | ||||
