LONDON (Alliance News) -Johnston Press PLC Wednesday posted a narrowed loss for its recently ended financial year, as despite revenue taking a hit from the sale of its business in Ireland and the continuing decline of print advertising in the recent year, the previous year had been hit by significant asset write downs.
The local and regional publisher has been struggling in recent years as advertisers reduce spending on ads in traditional newspapers, with the rising prominence of digital formats. Like its peers, Johnston is shifting its strategy towards the growing digital space, but has also had to address its debt-burdened balance sheet.
It underwent a significant refinancing last June to pay down its debt, raising GBP140 million in a placing and rights issue and GBP220.5 million through the issue of bonds, and securing a new GBP25 million revolving credit facility. The company subsequently proposed a 1-for-50 share consolidation to reduce the volatility of its share price.
At the end of the year the company's net debt stood at GBP184.6 million, down from GBP302.0 million at the end of 2013.
For the 53 weeks to January 3, the company posted a pretax loss of GBP23.9 million, narrowed from a pretax loss of GBP291.4 million in the 52 weeks to December 28 2013, on revenue of GBP268.8 million down from GBP290.0 million, mostly as a result of a significant reduction in exceptional costs.
In the current year it posted GBP53.8 million in exceptional costs, including GBP44.7 million in write downs of publishing titles and other assets, along with restructuring costs. However in the comparative period Johnston posted exceptional costs of GBP299.5 million due to impairment charges on its publishing titles and the value of its presses and property assets.
Johnston said that whilst there was an increase economic confidence in the latter part of the year, as a whole the year had been hit by challenging economic conditions in many parts of the UK. The company attributed the decline in revenue to the sale of its Irish business last April, and a decline in print advertising of 8.2%.
However, underlying digital advertising revenue rose 20% to GBP28.0 million from GBP24.0 million.
Johnston proposed no dividend, as the provisions of its bonds restrict it from doing so until some conditions are met. It noted that it wishes to resume the payment of its dividend "as soon as is appropriate". The company plans to retain cash for investment in supporting its growth strategy, and said that its 2015 results will see a full year benefit of its reduced financing costs.
In the eight weeks to end-February advertising revenues were down 4.1% from the comparable period in the previous year, Johnston said.
"Following the refinancing we are seeing the business transform into a modern multimedia organisation," said Chief Executive Officer Ashley Highfield in a statement. "We are excited about the future for the business and confident of delivering on our strategic objectives of growing an engaged audience base and returning our business to top line growth".
The company also announced Wednesday it has won a five-year "multi-million" pound deal to print Express Newspapers' Daily Express, Daily Star, Sunday Express and Daily Star Sunday titles. No further financial details were disclosed.
Shares in Johnston Press are trading down 1.0% at 167.75 pence Wednesday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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