Tepid UK trading and incessant print declines sent underlying sales down 4 per cent at Johnston Press (JPR). However, in what has become a familiar pattern for publishers, digital growth and cost-cutting boosted the regional paper owner's operating profits by 3 per cent to £55.5m.
The figures in our table partly reflect Johnston's rights issue and 50-to-one share consolidation last year. That raised about £361m, helping slash net debt by 39 per cent to £185m. Layoffs also meant its underlying operating costs fell by 6 per cent, but that was offset by £45m in one-off restructuring costs and write-downs.
Print weakness pushed total advertising sales down 5 per cent to £166m. But Johnston's investments in its property, motoring and recruitment websites fuelled a 36 per cent increase in its monthly digital audience to an average of 16.7m, sending digital revenues up a fifth to nearly £29m. Moreover, a new tie-up with Sky will allow Johnston's advertisers to use the pay-TV giant's household data to target campaigns more effectively.
Johnston's advertising sales were down 4.1 per cent in the first eight weeks of this year. More positively, its printing operation recently won a five-year contract with Express Newspapers, publisher of the Daily Star.
Broker Numis expects pre-tax profit of £36.1m, giving EPS of 27.1p (from £29.9m and 22.3p in 2014).
JOHNSTON PRESS (JPR) | ||||
---|---|---|---|---|
ORD PRICE: | 160p | MARKET VALUE: | £157m | |
TOUCH: | 158-161p | 12-MONTH HIGH: | 382p | LOW: 145p |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 189p* | NET DEBT: | 92% |
Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2010** | 336 | 14 | 4.7 | nil |
2011** | 316 | -122 | -12.0 | nil |
2012** | 303 | -6 | 0.8 | nil |
2013 (restated) | 290 | -291 | -90.8 | nil |
2014† | 269 | -24 | -0.4 | nil |
% change | -7 | - | - | - |
*Includes intangible assets of £514m, or 486p a share **Figures adjusted for rights issue and 50-to-one share consolidation †53-week period to 03 Jan 2015 |