Regional newspaper publisher Johnston Press reported the first rise in underlying operating profits since 2004, but the company still disappointed with a gloomy outlook. Revenues have continued to fall, driven principally by a 7 per cent decline in print advertising followed two years of double-digit decline, although underlying digital revenues grew by 4 per cent last year, albeit from a low base.
The company continues to reduce its cost base to offset the pressure on revenue, and operating margins of 18.1 per cent compare favourably with the peer group in the sector. The board's short-term priority remains debt reduction with year-end net borrowings down 8 per cent to £387m, despite incurring higher interest charges after the refinancing in 2009.
The public spending cuts impacted trading in the fourth quarter and this is still having an impact, with total advertising revenues for the first nine weeks of 2011 down by 11 per cent, not helped by a greater proportion of recruitment revenues last year. Significant challenges lie ahead, including refinancing group debt towards the end of 2011 and finding a successor for boss John Fry, who steps down in March 2012.
JOHNSTON PRESS (JPR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 9.75p | MARKET VALUE: | £62m | |
| TOUCH: | 9.5-9.75p | 12-MONTH HIGH: | 34.25p | LOW: 9p |
| DIVIDEND YIELD: | nil | PE RATIO: | 2 | |
| NET ASSET VALUE: | 64p* | NET DEBT: | 94% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 602 | 132 | 33.2 | 9.3 |
| 2007 | 608 | 125 | 28.9 | 10.0 |
| 2008 | 532 | -429 | -68.0 | nil |
| 2009 | 428 | -114 | -13.7 | nil |
| 2010 | 398 | 17 | 5.6 | nil |
| % change | -7 | - | - | - |
*Includes intangible assets of £907m, or 142p a share | ||||
