LONDON (Alliance News) - Regional newspaper publisher Johnston Press PLC Tuesday expressed confidence in its strategy and transformation projects, saying that whilst its second quarter was hit by a slowdown in general trading, July has shown some improvement.
In July the company had warned it currently expects its full-year profit to fall below market forecasts, hit by challenging trading in its first half. On Tuesday, Johnston reiterated that this means it enters its second half from a lower revenue base than planned.
For the 26 weeks to July 4, the company posted a pretax profit of GBP2.2 million, swung from a pretax loss of GBP6.3 million a year before, despite revenue reducing to GBP128.9 million from GBP135.8 million, mostly as a result of greater exceptional costs in the previous year.
Print advertising revenue fell 9.5%, and newspaper sales fell 5.3%, which offset a 17.5% rise in digital advertising revenue.
The fall in print advertising revenue came primarily in the second quarter, with advertisers holding back spend during May and June, the company said. However, in July print advertising improved compared to the second quarter, down 7.7% from a year before.
The company has continued to reduce operating expenses whilst simultaneously investing in its digital business. This has led to a net reduction in operating expenses of GBP5.0 million, and Johnston said it is confident it will achieve further cost savings in the year.
"Trading conditions in the first half of 2015 have undoubtedly been challenging, with May and June being particularly difficult - a time when there was also a high degree of uncertainty in the wider market," said Chief Executive Ashley Highfield in a statement.
"We will continue to drive for further improvement in revenues, albeit off a lower base, and will also continue to target further cost savings," Highfield added.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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