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12 Nov 2008 07:00
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For Immediate Release |
12 November 2008 |
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Johnston Press plc
INTERIM MANAGEMENT STATEMENT
Johnston Press plcΒ today publishes its Interim Management StatementΒ which has been drawn up for the 44 weeks to 1 November 2008, being the last practicable date, as required by the UK Listing Authority's Disclosure and Transparency Rules.
Total advertising revenues for the 44 weeks to 1 November 2008 wereΒ 15.5%Β down on the same period in the prior year. At the half year results announcement on 27 August 2008, the Group disclosed total advertising revenues had declined for the first 26 weeks of the yearΒ onΒ a like-for-like and constant currency basis by 9.5%. OverallΒ performance has deterioratedΒ since thenΒ due toΒ further substantialΒ declines in property advertising combined with significant falls in employment and display advertising as theΒ UKΒ andΒ RepublicΒ ofΒ IrelandΒ economies sufferedΒ from both the "credit crunch" andΒ aΒ reduction in economic activity asΒ both countriesΒ encounteredΒ recessionary pressures.
In weeks 27-44, there wereΒ year-on-yearΒ declines in property ofΒ 48.4%, employmentΒ 32.1%, motorsΒ 24.3% and displayΒ 12.1% on a likeίforίlike and constant currency basis.
Within the advertising decline ofΒ 15.5%Β for the 44 weeks, print advertising was down byΒ 17.4%, whilst digital advertising continued to grow strongly atΒ 36.8%, albeit with recent weeks showing slower growthΒ reflectingΒ theΒ performance ofΒ the wider economy.
Newspaper sales revenues after 44 weeks are slightly down on last year with circulations suffering from both the general economic conditions and a significant reduction in levels of interest in the property market. Contract printing revenuesΒ on a like-for-like and constant currency basisΒ are ahead of last year byΒ 5.3%Β as we enjoy the benefit of the full year of the News International contract atΒ Portsmouth. Other revenues are down year-on-year.
At the half year results announcement the Group demonstrated underlying cost savings of Β£7.6 million in the first 26 weeks of the year and this programme has continued into the secondΒ halfΒ with further significant savings being delivered as the GroupΒ adjustsΒ its cost structure to oneΒ which isΒ more closely aligned withΒ the current advertising environment. Arising from actions associated with this, there will also be an exceptional accelerated depreciation charge of approximately Β£9 million as a result of the closure of the Group's printing operations atΒ NorthamptonΒ as part of the Group's wider ranging cost saving initiatives. The Group also expects the full year exceptional charges relating to redundancy and reorganisation costs to be around Β£7Β million.
Net debt at 1 November 2008 was Β£465Β million, a reduction of Β£19Β million from the balance at 30 June 2008. It isΒ expectedΒ this willΒ reduceΒ againΒ between now and the year-end. AΒ further impactΒ onΒ theΒ full year impairment reviews of the carrying value of the Group's intangible assetsΒ is inevitable as a consequence ofΒ the continued deterioration in advertising trends.
Given the challenging and deteriorating economic and operating environment, the Group is concentrating onΒ managing its cost base and reducing its debt levels, but would still expect to deliver an operating profitΒ for theΒ fullΒ year at the lower end of current market expectations.
Contact:
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Tim Bowdler, Chief Executive or Stuart Paterson,Β Chief Financial Officer Johnston Press plc Tel: 0131 225 3361 |
Richard Oldworth or Richard Darby Buchanan Communications Tel: 020 7466 5000 |
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