LONDON (Alliance News) - Regional newspaper publisher Johnston Press PLC on Tuesday said its trading has remained challenging in the first half of 2015 and said it currently expects its full-year profit will fall below market forecasts.
The company said the second quarter of the year, following on from a solid first quarter, was hit by a slowdown in trading and weakness in the run up to and immediately after the General Election in the UK. It said it does expect July to show an improvement on this trend.
But Johnston said it expects revenue for the 26 weeks to July 4 to be down by around 5.5% year-on-year, with total advertising revenue to fall by 5% and circulation revenue to fall by around 5.5%, even as circulation volumes show a slight slowdown in the decline rate.
The expected declines in total revenue and total ad revenue are slightly faster than a year before. In the year-earlier period, total revenue fell by 4.3% and ad revenue by 4.6%.
Though Johnston said it took action to mitigate the revenue fall in the first half, profit for the period is set to fall year-on-year.
The company said its digital audience has continued to grow, and digital revenue is set to rise by 17% in the half. It expects to meet its digital growth targets for the full year.
But due to the weakness seen in the second quarter, the company comes into the second half of the year with a weaker base than had been planned, and revenue trends, though expected to improve, may still be dragged down by market volatility.
"Trading conditions in the first half of 2015 have undoubtedly been challenging, especially in the period around the General Election - a time when there was also a high degree of uncertainty in the wider market. Whilst we expect this will have an impact on profit both at the half year and the full year, there are positive indicators coming through with digital growth and continued strong cash flow," said Ashley Highfield, chief executive.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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