Johnston Press PLC Regulatory News (JPR)

INTERIM MANAGEMENT STATEMENT

Wednesday 13 November 2013

Johnston Press plc today publishes its Interim Management Statement which has been drawn up for the 18 weeks to 2 November 2013, this being the last practicable date, as required by the UK Listing Authority's Disclosure and Transparency Rules.

Highlights for the 18 week period to 2 November:

● Profit growth - operating profit* up 7.8% on 2012 with operating margin improving to 20%

● Improving revenue trend - total revenue declined -6.8% year on year, while advertising revenue was down -6.5%

● Digital revenue growth momentum continuing to build - digital revenue up 32% year on year for the period and up 44.7% in October

● New website roll-out completed in September providing robust platform for next phase of growth

● Cost base reductions continue - total costs down 10% year on year for the period, a reduction of over £30m YTD

● Total monthly average aggregate audience over the 18 week period growing by 7% to 25.3m with continuing strong growth in monthly digital unique users (up 39% year on year to 13.7m in October)

● Debt reduction remains a priority - 5% year on year reduction and further reductions planned

*Operating profit is stated before exceptional items

Operational Performance

The Group has continued to build on the good progress achieved in the first half of the year. Having achieved the first increase in like-for-like operating profit for seven years in the first half of 2013 of 4.3%, this was followed up by a 7.8% year on year growth in the 18 weeks to the end of October.

Operating profit margins increased to 20% in the period as a result of the continuing focus on costs. The cost base reduced by £32.4m (13.9%) year on year.

The reduced rate of decline in total revenues is encouraging with revenues for the period down -6.8% year on year. Advertising revenue decline reduced to -6.5% year on year compared to a 13.6% decline in advertising revenue reported in H1. Our key advertising revenue lines have benefited from a number of factors including our continued investment in our digital strategy, an improved sales process and a better economic outlook.

Following the completion of the re-launch of the Group's titles, print circulation revenue was -4.3% in the period.

A key objective during the period has been to maintain the accelerating growth of digital revenues by investing in new digital products such as SME marketing services (Digital Kitbag). In September, the re-launch of our 196 websites was completed and our investment is starting to deliver results. Monthly unique digital users reached 13.7m in October, up 39% year on year and now over a third of our users are accessing our news sites through mobile devices. Moreover, digital revenues in the 18 week period were up by 32.8% compared to the same period last year and in October were up by 44.7% year on year. This accelerating trend is underpinned by our drive to improve group digital conversion, which is now at 49.7%, meaning that almost half of our print advertisers are now also advertising with us online, and this continues to improve across the business.

As a result of the continuing growth in digital, the Midlands (our largest) publishing unit, achieved an important milestone, becoming the first to reach a digital 'Tipping Point' in local display advertising for the month of September, where the growth in local digital revenues outstripped the decline in local print revenues.

Outlook

Provided that the trading environment remains relatively stable and the full benefit of cost saving initiatives are realised, we expect full year operating profit to approach the mid-range of market expectations for 2013, having been impacted by increased paper prices, and after allowing for further investment in growing the digital business.

Commenting on the Interim Management Statement, Johnston Press' CEO Ashley Highfield said:

"I am pleased to report that our growth strategy is making good progress and has delivered encouraging results in the period. Digital revenue growth remains a priority and the Midlands reaching a "Tipping Point" in local display advertising is a highlight for the business. It remains a key goal for the whole Group to reach the point where digital growth will offset any further decline so we can return to overall top-line growth. With the refreshed print titles and websites averaging monthly audiences of over 25m, and new digital products and services, we believe that Johnston Press remains as relevant to local communities and advertisers, both local and national as it has ever been. We also continue to focus on reducing our cost base whilst increasing our investment in our digital future."

For further information please contact:

Ashley Highfield, Chief Executive Officer or David King, Chief Financial Officer

0207 466 5000 (today) or 0207 156 7929 (thereafter) 

Richard Oldworth/ Sophie McNulty/ Clare Akhurst

Buchanan 

0207 466 5000

The Interim Management Statement may contain forward looking statements, which have been made by the Directors in good faith based on the information available to them at the time of their approval of the Statement, and should be treated with caution due to inherent uncertainties, which are beyond Johnston Press' ability to control or estimate precisely and include both economic and business risk factors, underlying such forward looking information.