ClickAJob News

Regional newspaper group Johnston Press has confirmed that it is set to report a six per cent slump in annual pre-tax profits following a drop in advertising revenue.

In preliminary results, the company said that profit before tax and non-recurring items was £147 million in 2006, based on overall revenue which was up 16 per cent to £602 million.

Johnston Press said that total UK print advertising revenues for the first nine weeks of 2007 were down by 2.9 per cent on the previous year, while stressing that the fall in profits experienced in 2006 was as a result of a "downturn in the advertising cycle" which had affected all sectors except property.

Commenting, the firm's chairman Roger Parry stressed that the rate of decline was falling and said the company believed that year-on-year performance would improve over the coming months, with online revenues growing "rapidly but from a small base".

"In the broader context, we believe the main issues relating to advertising volumes are linked to overall economic conditions rather than online migration," added Mr Parry, commenting on the reasons for the possible downturn in advertising revenues.

The company said that it had placed a "heavy focus on organic revenue growth" over the year, through the development of new websites and print titles, but acknowledged that it expected revenues for 2007 to be at a similar level as those of 2006 despite the improvements.

"The investments in our new print operations and ongoing enhancements to our operating systems will bring benefits during 2007 but overall we expect revenues to be at a similar level to 2006," said Mr Parry, who added that Johnston Press would focus its efforts on maximising efficiency and driving new revenue growth in order to counteract rising newsprint and other underlying costs.

The newspaper group, which publishes more than 300 local and regional titles, set its final dividend at 6.2 pence, resulting in a total dividend of 9.3 pence, up by 11 per cent on the previous year.