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'Challenging environment'

Revenue slips at Johnston Press

Scotsman titleJohnston Press, owner of The Scotsman and i newspaper, said group revenue for the year fell 5% on the previous year.

Aadjusted Ebitda is in line with the board’s expectations. Cash balances at 30 December were £25m.

Digital revenue from continuing operations, excluding classified categories, was up 14%, while digital revenue including classified categories was up 3%.

Digital audience growth remains a strategic priority, and the number of unique users grew to an average of 25.4m unique browsers per month, a 13% increase on last year, with 108m average page views per month, 19% up on 2016.

In line with the group’s strategy of focusing on cities and towns with the largest digital growth opportunity, web traffic (i.e. page views) on The Belfast Newsletter, was up 48%; Yorkshire Evening Post (Leeds) was up 47% with the Sheffield Star up 42% and The Edinburgh News up 39%, year on year.

Newspaper circulation revenue from continuing operations was up 2% year on year, benefiting from the full year effect of the i newspaper, acquired in April 2016.

Total publishing revenues (total advertising and newspaper circulation revenue) from continuing operations were down 6% year on year, 13% excluding the i newspaper which took 20% market share of the ‘Quality’ weekday market. Newspaper circulation revenue was up 19%, and advertising was up 26% in the second half, on a like for like basis.

The relaunch of the weekend edition in September 2017 saw an average increase in circulation in the three months post relaunch of 9k copies, to 272k. Digital audiences averaged over 1.4m unique browsers per month, up 45% year on year.

Contract printing revenue was up 4% year on year with the benefits of winning new printing contracts (including the Daily Mail and Metro) outweighing circulation decline in some existing contract print titles.

Last year, the group announced it had commenced a strategic review to assess the financing options in relation to its £220m 8.625% senior secured notes which become due for repayment on 1 June 2019.

The board subsequently announced that it was approaching its largest bondholders regarding the formation of an ad hoc committee of bondholders, which was formed in October.

Discussions with advisers to the ad hoc committee are in progress. Any proposal that results from these discussions will remain subject to negotiation and the consent of relevant stakeholders, and there can be no certainty that a formal proposal will be forthcoming.

Ashley Highfield, CEO of Johnston Press, said: “We remained focused on delivering the priorities outlined to shareholders, amidst an extremely challenging trading environment.

“The i has delivered a very strong performance in our first full year of ownership. A slowing down of top line decline is encouraging while further growth in our audiences and digital revenues, underpinned by additional cost reduction, enabled us to maintain profit margins.

“In 2018, alongside our strategic review of financing options, we will continue to invest in the business, including recruiting 32 journalists funded by the BBC, and a further 21 editorial staff and 10 specialist digital sales staff as we seek to accelerate digital growth further.”

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