Johnston Press plc today publishes its Interim Management Statement 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 were 15.5% 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 year on a like-for-like and constant currency basis by 9.5%. Overall performance has deteriorated since then due to further substantial declines in property advertising combined with significant falls in employment and display advertising as the UK and Republic of Ireland economies suffered from both the "credit crunch" and a reduction in economic activity as both countries encountered recessionary pressures.
In weeks 27-44, there were year-on-year declines in property of 48.4%, employment 32.1%, motors 24.3% and display 12.1% on a like-for-like and constant currency basis.
Within the advertising decline of 15.5% for the 44 weeks, print advertising was down by 17.4%, whilst digital advertising continued to grow strongly at 36.8%, albeit with recent weeks showing slower growth reflecting the performance of 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 revenues on a like-for-like and constant currency basis are ahead of last year by 5.3% as we enjoy the benefit of the full year of the News International contract at Portsmouth. Other revenues are down year-on-year.
At the half year results announcement the Group demonstrated underlying cost savings of £7.6 million in the first 26 weeks of the year and this programme has continued into the second half with further significant savings being delivered as the Group adjusts its cost structure to one which is more closely aligned with the current advertising environment. Arising from actions associated with this, there will also be an exceptional accelerated depreciation charge of approximately £9 million as a result of the closure of the Group's printing operations at Northampton 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 £7 million.
Net debt at 1 November 2008 was £465 million, a reduction of £19 million from the balance at 30 June 2008. It is expected this will reduce again between now and the year-end. A further impact on the full year impairment reviews of the carrying value of the Group's intangible assets is inevitable as a consequence of the continued deterioration in advertising trends.
Given the challenging and deteriorating economic and operating environment, the Group is concentrating on managing its cost base and reducing its debt levels, but would still expect to deliver an operating profit for the full year at the lower end of current market expectations.
Tim Bowdler, Chief Executive or
Richard Oldworth or