Final Results

25 March 2015

JOHNSTON PRESS PLC

RESULTS FOR THE 53 WEEKS ENDED 3 January 2015

Underlying profit before tax up 235.1%; Underlying operating profit up 2.8%; Net debt down 38.9%1

Johnston Press plc ("Johnston Press" or "the Group"), one of the leading media groups in the UK, announces its results for the 53 weeks ended 3 January 2015.

2014 was a 53 week trading period and the underlying results have been adjusted to exclude the impact of the extra week. Unless otherwise stated, or where the context otherwise requires, financial information in this announcement is provided on an underlying basis.1

Key highlights1:

· Profit before tax: Underlying profit before tax increased 235.1% to £29.9m from £8.9m

· Operating profit: Increased for the second consecutive year to £55.5m - up 2.8%

· Revenue: Total underlying revenues of £265.9m reflect a decline of 4.4% for the period

· Digital revenues: Up 20.0% for the period, from £24.0m to £28.8m representing 17.4% of advertising revenues (2013: 13.8%)

· Digital audience grew by 35.8% to an average of 16.7m in 2014 (2013: 12.3m)

· Cost reduction: Operating costs reduced by £13.8m net of investment in digital

· Operating margin: Up to 20.9%, from 19.4%

· Continued debt reduction: Net debt down to £184.6m at period end (2013: £302.0m), reflecting refinancing

During 2014 we continued to transform our business in line with the strategic priorities set out in 2012. The debt and equity refinancing in June provided a platform of financial stability to allow us to focus on our strategic objectives, including growing our digital business, beginning the process of changing the way we create content in our newsrooms and structure our sales teams and continuing to increase our overall audiences.

Financial Highlights:

Strategic progress

Digital revenue growth:

Digital revenues were up 20.0% underlying in the full year growing from £24.0m to £28.8m with property, motors and local display joining employment in showing strong year on year growth. New products and national platforms for local businesses for example SkyAdsmart and 1XL were launched and DigitalKitbag was rolled out.

Returning to top line growth:

Total underlying revenue of £265.9m declined 4.4% for the period, reducing the rate of decline from 5.2% in 2013 and 7.4% in 2012.

· Total advertising revenues of £165.7m declined 4.7%, print advertising declined 8.7% to £136.9m while digital revenues were up 20%. The employment category led the way with revenue growth of 3.4%, becoming the first to reach the overall digital tipping point.

· Newspaper sales revenue was down 4.8% from £81.8m to £77.9m.

Audience growth:

Average total monthly audience for the year was 27.3m, up from 24.5m in 2013, representing an increase of 11.4%. Digital audiences grew by 35.8% from an average in 2013 of 12.3m to an average of 16.7m per month in 2014. 40.7% of our digital users are now reached via mobile devices (2013: 31.7%).

Strong cost discipline

Underlying operating costs were reduced by £13.8m (6.2%) to £210.4m, net of digital investment, while financing costs (excluding exceptional items) of £21.5m in H1 were reduced to £9.7m in H2.

Exceptional items

The results include a net charge before tax of £53.8m in respect of exceptional items. Exceptional operating costs of £44.7m relate to further write-downs of publishing titles and other assets, along with business restructuring. Exceptional finance costs of £9.0m were associated with the refinancing and include an interest accrual release offset by the write off of term debt issue costs and debt refinancing fees.

Net debt and financing costs

Successful refinancing of existing debt facilities completed in June 2014 through a £140m placing and rights issue and raising £220.5m in a £225m 8.625% bond issue due 2019.

· Net debt post refinancing was reduced to £184.6m (2013: £302.0m) after initial discount and marking to market.

· Net cash inflow from operating activities was £7.8m, after annual pension contributions of £6.3m and exceptional pension contributions of £8.2m and redundancy costs of £9.9m. Excluding exceptional items, the Group generated operating cashflows of £30.7m, while the disposal of the Republic of Ireland business in April 2014 to Iconic Newspapers Limited generated £7.1m.

· Total finance costs reduced from £45.8m in 2013 to £34.6m.

Bond buy-back

Consistent with the strategy to use surplus cashflow to reduce the overall leverage of the Company over time, the Company has allocated £5.0m of its cash to buy-back bonds in the open market over the coming months.

Capital structure

Further to the refinancing carried out in 2014, the Company has lodged a petition with the Court of Session seeking approval for the reduction of the Company's share premium account by £275.0m to eliminate the accumulated deficit on the profit and loss account and create distributable reserves going forward.

Dividend

The provisions of the bond restrict the Company's ability to pay dividends until certain conditions, including that net leverage is below 2.25x EBITDA, are met. Although the Board wishes to resume dividend payments as soon as is appropriate, no ordinary dividend is proposed for the period.

Earnings per share

The rights issue and subsequent share consolidation distorts the EPS metrics. For information, underlying and proforma calculations are presented below:

· Proforma underlying earnings equates to net underlying profit of £27.1 million (28 December 2013: £13.2 million) less preference share dividends of £0.15 million (28 December 2013: £0.15m).

· Proforma basic EPS has been calculated based on the closing number of shares in issue of 105.9 million and deducting the number of shares held by the Company's employee share trust of 0.5 million. Proforma fully diluted EPS assumes the maximum potential dilutive impact and the maximum number of shares the Group could be called upon to issue to satisfy the full vesting of VCP and employee share and deferred bonus schemes.

Outlook

· The period to date to 28 February 2015 is an 8 week period compared to the 9 week period in 2014. Advertising revenues for the comparable 8 week period to 28 February 2015 were down 4.1%. The group remains focused on digital growth and driving increased audiences. Business transformation remains at the forefront of our plans, and following a successful pilot, Newsroom of the Future is being rolled out across the group, together with the new sales model.

· The group will retain cash for investment in support of the growth strategy, while 2015 will see the full year benefit of reduced financing costs.

Commenting on the annual results and outlook, the Chief Executive, Ashley Highfield, said:

"Following the refinancing we are seeing the business transform into a modern multimedia organisation. The strong growth in our digital audiences and accelerated growth of digital revenues, aided by the roll-out of Digital Kitbag and the launch of Sky Adsmart and 1XL are changing the shape of the Company. We are excited about the future for the business and confident of delivering on our strategic objectives of growing an engaged audience base and returning our business to top line growth".

For further information please contact:

Investor presentation and audio/webcast:

A presentation for analysts and live audio/webcast will be held at 11.00am on Wednesday 25 March 2015 at Bell Pottinger, Holborn Gate, 330 High Holborn, London, WC1V 7QD.

Webcast link: https://secure.emincote.com/client/johnston_press/johnston001/

A replay will be available after 2.00pm on the Group website www.johnstonpress.co.uk

To ensure admission to the presentation or to request conference call details, please confirm your attendance with Stephanie Sheffrin (ssheffrin@bellpottinger.com).

Please see the conference call dial in details below:

Number: +44 20 3059 8125 (no pin needed)

The announcement for the period ended 3 January 2015 will be available at  www.johnstonpress.co.uk/investors

Forward-looking statements

The report contains forward looking statements. Although the Group believes that the expectation reflected in these forward- looking statements are reasonable, it can give no assurance that the expectations will prove to have been correct. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward looking information, actual results may differ materially from those expressed or implied by these forward looking statements. The Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Chairman's Statement

2014 was the year we started to see signs of an improving economic climate and further positive results from delivery of our strategy.

We have seen another year of profound change, both for the Company and the industry in which we operate. Throughout this time we have continued to innovate and to maintain our place at the forefront of the changes in our sector.

The successful completion of our refinancing plan in June 2014 has helped to provide a level of financial stability which has allowed us to focus on the pursuit of our increasingly digital strategic objectives. The refinancing saw £140 million being raised through a placing and rights issue and a further £220.5 million through the issue of bonds. In addition, we agreed a new £25 million revolving credit facility (which remains undrawn) and entered into revised pension arrangements. The refinancing allowed us to exit from our previous borrowing arrangements - lengthening the duration of our borrowing facilities, significantly reducing the Company's financing costs and removing the operational restrictions which those facilities imposed. One effect of the placing and rights issue was that the Company had a very large number of shares in issue with a correspondingly low share price. The 50 to one share consolidation we undertook towards the end of the year addressed this, placing our share price at a more appropriate level.

Throughout 2014 we have continued to focus on our strategic priorities. We have remained at the forefront of our sector's shift to digital and our initiatives in 2015 will seek to maintain that advantage. I have previously identified our digital business as key to our future and our plans to change the way in which we create content in our newsrooms and structure our sales teams to reflect this. We are working hard to deliver a return to revenue growth and have reached the digital tipping point on 290 occasions in 2014¹. It is essential that we drive further digital growth while continuing to protect our print-based revenues. Our key initiatives are set out in detail in the Strategic Report.

Although the latter part of the year saw increased economic confidence, trading for the year as a whole continued to be affected by challenging economic conditions in many parts of the UK. In addition, our results reflect the increased investment in very targeted aspects of the business. Overall, the strong performance in some categories of our business was very encouraging. Total statutory revenues were affected by the disposal of our business in the Republic of Ireland in April and ended the year down 7.3% from £290.0 million to £268.8 million. Statutory print advertising was down 8.2% from £150.4 million to £138.1 million.

Combined print and digital advertising revenue was down 4.2% to £167.2 million in 2014; whilst underlying advertising revenue was down 4.7%. The overall rate masks several areas of strong performance with employment total underlying advertising revenue growth of 3.4% leading the drive towards the advertising tipping point.

Once again, underlying digital revenues grew strongly in the year by 20.0% from £24.0 million to £28.8 million. Property, motors and local display all joined employment in showing strong year-on-year growth.

Underlying newspaper sales revenue, supported by cover price increases, was down 4.8% from £81.8 million to £77.9 million.

Underlying operating costs were reduced to £210.4 million from £224.2 million in 2013, a £13.8 million year-on-year reduction net of investment in the digital business, reflecting our focus on cost leadership. Our programme of process and efficiency improvements and digital investment will continue in 2015.

The resulting statutory operating profit was £10.7 million, a significant improvement on the prior year operating loss of £245.7 million including exceptional items. On an underlying basis, operating profit was up 2.8% from £54.0 million to £55.5 million with underlying operating profit margins improving from 19.4% to 20.9% year-on-year.

Underlying basic earnings per share, from continuing operations, was 0.76p, compared to 5.46p in 2013, comparatives have been restated to show additional bonus and rights issues of the Capital Refinancing Plan and share consolidation (Refer Note 14 and 27 for further detail). Statutory loss after tax, from continuing operations, was £15.3 million (2013: £215.7 million loss). Cash flow performance in the second half of the year benefited from the impact of the refinancing. Net debt at the end of the year was £184.6 million, a reduction of £117.4 million on 2013.

Total pre-tax exceptional items were £53.8 million (2013: £300.2 million). The 2014 exceptional items included £24.5 million of write-down or impairments on publishing titles, property and assets held for sale, £16.5 million of restructuring and pension costs, £4.6 million relating to our long term incentive plans, £9.1 million of financing costs resulting from the refinancing and a £0.9 million gain on property disposals. More information on the exceptional items can be found in the Financial Review section of this report and Note 6 of the financial statements.

¹Digital tipping point is defined where 2014 revenue exceeds 2013 revenue within a category, within a Publishing Unit, within a given month.

Dividend

As we explained when details of the refinancing were announced, the provisions of our bonds restrict the Company's ability to pay dividends until certain conditions are met. Although the Board wishes to resume dividend payments as soon as is appropriate, no dividend is proposed for the year.

2014 marked the establishment of the Independent Press Standards Organisation (IPSO) as a new independent monitoring and complaints body for our industry. We have joined IPSO and believe it offers a system of redress which is both accessible and effective for those with a complaint while being tough, fair and proportionate for local newspapers. We have used the launch of the organisation to review our internal and external procedures to ensure that they comply with IPSO's requirements.

I would like to thank my Board colleagues for their leadership, particularly during the refinancing process in the first half of the year. In order to ensure stability during that time, the Board determined that it would not review its make up until the completion of the refinancing.

The Board regularly reviews both the balance of its membership and the issues it considers when it meets. The agenda for the Board's meetings continue to be structured to scrutinise both strategic and operational matters in an atmosphere of constructive challenge and debate. I am satisfied that the Board remains effective.

We are well aware of the hard work of our employees and the considerable change they have seen in recent years. On behalf of the Board I again wish to express our gratitude to them for their dedication. Once more they have continued to deliver high quality work and play an essential role in our ambition to be the fabric which binds local people with local businesses.

Chairman

Chief Executive Officer's Report

Second consecutive year of underlying operating profit growth.

During 2014 we continued at pace to transform our business into a modern multimedia organisation; the changes implemented supported us in continuing to meet our strategic objectives of growing an engaged audience base and returning our business to top line growth.

2014 was the second consecutive year where we posted underlying operating profit growth, a satisfying achievement given that growth in 2013 followed seven years of operating profit decline. It was also a year in which we were hailed as one of the most attractive turnaround stories in the UK market¹, with Digital Kitbag and Sky Adsmart heralded as exciting initiatives.

Underlying digital advertising grew by 20.0%, with strong growth in key categories such as Entertainment (WOW247) growing by 244%, The Smartlist, one of our employment offerings, grew by 211%, Motors up 88%, Property up 52% and Local Display up 19%.

Our aggregate audiences have continued to grow; our average monthly audience for the year was 27.3 million, up from 24.5 million in 2013, a growth of 11.4%. A key driver for this growth was our digital audience which grew by 35.8% from an average in 2013 of 12.3 million unique users a month, to an average of 16.7 million in 2014.

Our digital kitbag offering had its first full year, having launched in late 2013, and an agreement was signed with Sky to sell their Sky AdSmart solution. Both of these initiatives support our advertisers to target the customers more precisely and with a clear return on investment I'm excited about these and other digital initiatives that we will deliver in 2015. In October 2014 alone we sold digital kitbag offerings to 390 new customers.

We were instrumental in developing and launching the 1XL initiative which will substantially change the way national advertisers engage with local press for digital advertising. 1XL is a collaboration of local and regional press organisations that gives us a truly national reach. This is yet another initiative that will support our objective of top line advertising revenue growth in 2015 and beyond.

In 2012 we extended our existing lending facilities through to September 2015. The terms of those facilities provided strong incentives to implement a debt refinancing by the end of 2014. I am pleased to report that in 2014 we achieved that through a fundamental restructuring of our debt, and pension obligations, which has provided a more balanced capital structure with a significant reduction in leverage and in turn has provided a significantly improved platform for the Company to continue its strategic initiatives.

At the end of 2014, our net debt stood at £184.6 million, down from £302.0 million at the end of 2013. With this substantial reduction of debt we have also been able to secure a lower interest rate and therefore a significantly reduced interest charge and we have also extended the maturity of our debt. This saving will allow us to increase the investments we make in our business in order to deliver on our strategic objectives, while continuing to pay down debt.

We managed production costs tightly and supported by lower prices for paper, we reduced our production costs by 3.3%. We recorded savings across pre-press, printing, newsprint and distribution. Our total underlying costs, driven by headcount reductions reduced by £13.8 million, net of investment in our digital business, a year-on-year reduction of 6.2%. All this supported underlying operating profit growth of 2.8%.

Significant progress has been made in implementing the longer-term vision for the future of Johnston Press with changes and innovations being undertaken to grow our audiences, transform our revenue base and maintain our cost leadership position.

Transformation programmes such as 'Newsroom of the Future', alongside new ways of working in our sales and operational teams, will be key to how we adapt to our changing environment, and the new approach will enable our teams across the business to concentrate on the things that are most important - delivering what our readers and advertisers want, in a cost effective and efficient manner.

The focus on quality will continue to be key. We want to achieve a big increase in customer and reader satisfaction by continuing to improve our end-to-end processes across our sales and editorial functions. To enable these priorities, we are focusing on two core transformation programmes in 2015, which have already started to make substantial progress. These projects are:

Audience strategy - driven by the 'Newsroom of the Future' project, a concept that we piloted during 2014 and will roll out this year. This will re-engineer our newsrooms to equip us to cope with the demands of reporting in the modern age. In the future our newsrooms will deliver;

¹Source: Peel Hunt, November 2014.

Chief Executive Officer's Report (continued)

· Larger and more engaged digital audiences

· An improvement in the print product

· More contributed / user generated content will appear on more platforms, more of the time

· Staff will have new workflows, technology and tools, freeing up time for more investigative journalism and improving productivity, whilst reducing costs.

Commercial strategy - we are starting to pilot new models for our sales teams and equipping our operational teams to work in different ways, enabling both to deliver high quality and effective solutions for our customers. Salesforce of the future will aim to;

· Retain more existing customers

· Improve yields

· Move to solution selling

· Improve customer satisfaction

· Reduce field sales costs

We continue to be exceptionally well placed to meet the demands for information from the communities we serve, but the way we do this is changing and the growth of our mobile audiences continues to reflect this. Successful implementation of our transformation projects will ensure that we continue to be well placed to serve our communities in the years to come.

Our financial performance, underpinned by our refinancing, is stabilising and provides us with the confidence and ability to invest in transforming our business into a modern multimedia organisation.

Chief Executive Officer

Operational Review

Delivering our Strategy

Throughout 2014 we focused on delivering our key audience and commercial development strategies, supported by digital product and market innovation. Our audience strategies concentrated on content improvement in print and improved digital engagement and differentiation, has led to overall average monthly audience growth of 11.4% from 24.5 million to 27.3 million. 

The commercial strategy has focused on improving end-to-end service quality and design led advertising initiatives to improve the relevance of our service offerings and advertiser customer experience. On-going development of our Media Sales Centre has focused on improving service quality and efficiency.

Audience Development:

Print quality improvement has been driven through our content improvement plan and enabled through increased sharing of high quality content. This has been facilitated by the 'Great Sharing Hub' and our three centralised design hubs, providing smarter and faster newspaper design. 

During the year, our design hubs have broadened their remit considerably to become important providers of editorial content to the business.

As well as frequent Group supplements, the hubs now produce many pages of new, feature and lifestyle material which can be used in titles across the Group. These pages are accessed through a central website portal - called Great Content - and placed on the page without the need for editing (made possible through the use of common page designs). A new single Weekend section has been developed to replace the multitude of approaches in our daily titles' Saturday editions, featuring better content and clearer design, curated entirely by the hubs.

Great Content is also home to the work of many of our columnists whose work can appear in multiple titles, as well as a live feed of shareable content written by reporters and feature writers in the Group. This emphasis on 'create once - use many times' is a key part of the Group's Print Content Improvement Project and 'Newsroom of the Future' strategy.

The design hubs are now leading the development of visual storytelling in editorial, both online and in print. Designers are creating central repositories of infographic resources and working with editors to produce new ways of explaining content to readers with evolving demands.

Their design skills, honed for print, are also being adapted for digital long-form-storytelling platforms - a great example being the Scottish Independence Referendum which repurposed Scotsman content into a dynamic online package featuring a variety of multimedia elements.

Photographic services were outsourced in 2014, providing an enhanced service while reducing costs.

Digital Product and Market Development:

In 2014 we launched improved platforms for our Jobstoday.co.uk business, which continued to strengthen its digital performance, including the launch of the new Smartlist specialised recruitment service.

Our WOW247.co.uk entertainment platform continued to grow, nearing 500,000 unique users per month during peak months of festivals in the UK. Development and expansion of this business will continue in 2015.

Our newsrooms now have real-time data on web site usage that is helping them create the right content for digital platforms based on the interests of the audience.

We also launched redesigned web sites for 2015 which will position our business for the significant anticipated growth in mobile usage in 2015. We experienced accelerating mobile traffic throughout 2014 and are now in a strong position to exploit this trend.

In 2014 we signed an agreement with Sky to sell their Sky AdSmart solution, which is a unique proposition to deliver targeted television advertising. This initiative supports our advertisers to target the customers more precisely, combining Sky household data and the power of television with JP advertiser relationships.

Commercial Development

Design-led advertising was initiated to provide customers with improved advertising services and the ability to commission a coherent, professionally designed, multi-channel campaign. For smaller, less frequent advertisers, template designs have been developed to provide customers with a range of standard creative solutions together with a simplified booking process and focus on reducing advertising errors. In addition, these template advertisements provide benefits in the newsrooms as advertising is more predictable and to standards formats, sizes and shapes. 

Both initiatives lead to an enhanced final product in print or online with modern, professional adverts improving the look and feel of the final product.

Operational Review (continued)

The Media Sales Centre continues to deliver significant growth and had revenue improvements throughout 2014.

All four combined classified categories (Employment, Public Notices, BMDs, Other Classified) saw year-on-year growth of 7% with a 20% year-on-year improvement in digital revenues, on an underlying basis.Group investment in the new digitally led outbound recruitment team saw a significant return in 2014 with the Employment category performing +3.4% year-on-year, on an underlying basis. This team will be well positioned to take full advantage of the strong recruitment market going into 2015. In Other Classified, several new product launches in the A5 magazine market and a focus on our digital products saw this category grow year-on-year for the first time in over five years. The new digital recruitment platform, the sales of mobile display inventory and the consolidation of digital birth, marriage and death announcements and Public Notices all contributed to the 29% year-on-year improvement in digital revenues across the media sales centre.

We monitor very closely to how we are rated by two of our key stakeholders: our customers and our staff. We are rated by our customers using the Net Promoter Score (NPS) and have just completed our fourth staff satisfaction survey. We have been encouraged by improvement in some of our NPS scores.

Staff engagement through 2013/2014 had a positive impact on the overall performance of the Media Sales Centre in particular. In 2014 the mean average score for engagement improved markedly on the previous year. Four of the key indicators were staff recognition, job satisfaction, line management support and living the values, all of which contributed to the result.

Operations and Production

The Group's printing business operates out of three sites in Portsmouth, Dinnington and Carn. With the continuing reduction of press availability in the industry the Group has strengthened its position in the contract print market. The Group's state of the art presses continue to perform at optimum quality and produce print products with increasing efficiency.

Major customers include Local World, Tindle Newspapers, Times Educational, Guardian Media Group, Trinity Mirror, as well as many niche publications. The print sites are well placed geographically to meet publisher's distribution requirements with integrated logistics services.

A full review of the Group's logistics operations was undertaken in 2014 with the majority of the delivery routes now being outsourced to a single supplier specialising in the distribution of time sensitive products. This initiative has significantly improved the efficiency and timeliness of product delivery to market and substantially reduced costs.

In 2014, the Group appointed a Chief Creative Officer with a brief to greatly improve the Company's creative capability and digital advertisement product innovation. Our Customer Service Department has also been consolidated so that all customer interactions for any digital or print product can be handled by a single point of contact, improving the customer experience.

With the continued strong growth in our digital audience it has been vital to continue to improve the infrastructure on which the Group's websites rely. In 2014, a number of substantial upgrade programmes have been completed including the roll-out of a 'Content Delivery Network' to all websites and the introduction of a new storage platform.

Following the completion of the Mobile Journalist project in 2013, a number of enhancements to the Group's remote working systems were made during 2014 with the aim of further improving the ability of Editorial staff to work from the heart of their local communities.

Work to further improve the quality and delivery speed of reporting and analytics data continued throughout 2014. A new system for analysing the behaviour of website visitors has been implemented across all of the Group's websites. This system allows journalists to see the audience engagement level of each and every article that is published throughout that article's entire life-cycle. These metrics can then be used to make real-time decisions on how to improve engagement and increase traffic volumes.

Property & Estate

We have continued to review our property portfolio to identify markets and centres that have accommodation which no longer meets the requirements of the business. During 2014 we disposed of 23 freehold properties and removed ourselves from 15 leases (net of relocations). These include significant relocations including The Scotsman, to new offices in Edinburgh, and the remaining digital and accounts teams to new fit-for-purpose offices in central Peterborough. Overall we have reduced the total number of properties within the portfolio from 188 at the start of the review in 2012 to 150 at the end of 2014, with nearly half of all staff either having relocated or having seen investment in their environment.

Although a great deal of progress has been made during 2014, the projects will continue as the portfolio is rationalised further with an expectation of the overall number of properties eventually falling below 100.

This emphasis on 'create once - use many times' is a key part of the Group's Print Content Improvement Project and Newsroom of the Future strategy.

Financial Review

In 2014 we achieved a statutory operating profit of £10.7 million; underlying operating profit grew by 2.8% year-on-year to £55.5 million, and underlying profit before tax increased from £8.9 million to £29.9 million. The Group also completed its refinancing, raising £360.5 million from a placing and rights issue and bond offer.

This Financial Review, based on the consolidated financial statements of the Group, provides commentary on the Group's performance during the 53 week period ended 3 January 2015 (2013: 52 weeks).

In preparing commentary on performance, the financial impact of a number of significant accounting and operational items affecting the results have been adjusted for in arriving at the underlying results discussed in this Financial Review. A reconciliation from the statutory to underlying results is provided below along with a description of the nature of the adjustments made.

In the first half of 2014 the Group disposed of its Republic of Ireland business, which comprised 12 titles and revenues of £2.8 million in the 3 months until disposal. As this business has been reported as discontinued, the results are not included in the comparison of statutory to underlying performance table. Comparatives have been restated accordingly.

2014 was a 53 week trading period; and the underlying results have been adjusted to exclude the impact of the extra week and the narrative has been focused on underlying performance.

Financial Review (continued)

¹Exceptional items are set out in Note 7 to the condensed financial statements.

²Other adjustments reflect the impact of pension plan admin expenses recognised due to the adoption of IAS19R (Note 18), share based payments and disposed titles as well as the impact of the termination of the News International (NI) printing contracts in 2013.

³Operating costs include cost of sales and are stated before depreciation and amortisation.

4EBITDA is earnings before interest, tax, depreciation and amortisation.

5 In October 2014, the Letterbox Direct business was outsourced. There has been no adjustment made to the Underlying results in 2014, but an adjustment will be reflected in 2015 comparators to for underlying purposes.

6 Calculated on unrounded numbers.

Exceptional Items

Exceptional items, totalling £53.8 million (2013: £300.2 million), include £24.5 million of publishing title impairment, and property and asset held for sale write-downs, £21.1 million on restructuring and other costs, £9.1 million of financing costs resulting from the refinancing and a £0.9 million gain on sale of property. For additional discussion refer to Note 7 to the condensed financial statements and further detailed explanation of Exceptional items provided within the Financial Review section.

53 Week Adjustments to Reflect 'Underlying' Business

The effect of the 53rd week of trading in 2014 has been included as an adjustment to the underlying results with the revenue adjustments equating to the final week of revenue of £2.9 million, and an estimate made for the final week of production and other operating costs of £1.5 million.

Other Adjustments to Reflect 'Underlying' Business

The detail of the Other adjustments made are as follows:

· In 2014, £1.5 million of other adjustments were made to reflect the underlying business, including £0.8 million of pension plan admin expenses recognised due to the adoption of IAS19R (Note 18); and £0.7 million of share based payments charges.

· In 2013, £1.8 million is included as an adjustment to underlying revenues, and £1.9 million to underlying operating costs.

o Three titles disposed of during 2013, an adjustment for revenues of £0.9 million and associated production costs of £0.3 million have been removed from the underlying results.

o A £0.9 million revenue adjustment was made for the loss of a printing contract with News International in 2013, together with a cost adjustment of £0.3 million. (Refer to the 2013 Annual Report for details on the calculation basis).

o £0.8 million adjustment for pension plan expenses (Note 18); and

o £0.5 million share based payments.

Financial Review (continued)

Performance Review of Continuing Operations

¹Underlying results excludes Exceptional items (Note 6) and includes adjustments made to remove the 53week effect, reflect the impact of pension plan admin expenses recognised due to the adoption of IAS19R (Note 18), share-based payments and disposed titles as well as the impact of the termination of the News International printing contracts in 2013.

²Operating costs include depreciation, amortisation and exceptional items.

³Contract print revenues earned in the nine months since disposal of the Irish business to Iconic Newspapers on 1 April 2014 were £0.8 million.

4The % change variance has been calculated based on unrounded numbers.

Financial Review (continued)

Advertising Revenue

Total advertising revenues in 2014 were £167.2 million, a statutory decline of 4.2% from the previous year. The underlying decline was 4.7% after adjusting for the effect of 53 trading weeks in 2014 and disposing of a number of smaller titles in 2013. On an underlying basis, the decline in total advertising revenues was 4.6% in the first half and 4.9% in the second half.

Underlying Print and Digital Advertising Revenue Analysis

¹The % change variance has been calculated based on unrounded numbers.

Property

2014 remained a difficult year for our property category. Property prices grew in most of the regions in which we operate, however the market remained challenging for Estate Agents, our core advertising base, with volumes and sales commissions not matching the pace of price rises. The property category decline was 7.8% year-on-year in 2014, with January to June declines of 8.1%, reducing to a decline of 7.4% in the second half of the year. Digital advertising grew 52.0%, albeit from a low base.

Employment

In our employment category the 'revenue tipping point' was reached, as digital revenue growth of 12.3% year-on-year outweighed the print revenue declines of 2.0% to achieve an overall growth of 3.4% in this category. This was driven by further investment in sector specific recruitment products, such as the 'Accountancy List'. Our employment category was our strongest performing category over the year and generated £20.5 million in 2014. While the Employment market remains strong, our improving performance in this category and changing mix from print to digital is expected to continue into 2015.

Motors

Overall the motors category generated £14.5 million of revenue in 2014, broadly flat on prior year. In the second half of the year motors achieved a tipping point, off the back of a first half year decline of 1.8%. The print category declined 5.8% with digital growing by 88.2%.

Other

The 'Other' category includes Entertainment, Public Notices, Birth, Marriages and Deaths (BMD's) and Other Classified, DealMonster and other digital income. This combined category generated £40.4 million in revenue, an annual decline of 4.6%, with print declining 8.1% and digital growing by 15.4%.

Display

Display advertising remains our core advertising category and helps to build brand awareness for our local and national advertisers. Overall display advertising generated £67.8 million in 2014, an annual decline of 7.0%, following softening national retail advertising in the lead up to Christmas.

Financial Review (continued)

¹The % change variance has been calculated on unrounded numbers.

Audience Growth

Our aggregate audiences have continued to grow year-on-year, our average monthly audience for the year was 27.3 million up from 24.5 million in 2013, a growth of 11.4%. A key driver for this growth was our digital audience which grew by 35.8% from an average in 2013 of 12.3 million to an average of 16.7 million in 2014. Refer to the Market trends section for further details.

Non-Advertising Revenue

Newspaper sales generated statutory revenues of £79.1 million in the year against £82.1 million in 2013, a decline of 3.7%. The underlying decline was 4.8% after taking account of the 53 week effect and adjusting for three disposed titles in 2013.

Statutory contract printing revenue was down 39.6% year-on-year almost exclusively a result of the termination of the News International contract in 2013. On an underlying basis revenues improved by 22.3% as a result of the full year effect of new print contract wins, and the Iconic contract following the disposal of the Irish titles

Operating Costs

Statutory operating costs, excluding exceptional items, were reduced to £213.4 million from £226.1 million in 2013, a £12.7 million year-on-year reduction.

On an underlying basis, after adjusting for week 53 and other adjustments (closure of titles, stripping out the costs associated with the termination of the News International print contract, share-based payments and pension plan expenses), operating costs decreased by £13.8 million to £210.4 million (2013: £23.6 million year-on-year cost saving). This cost saving was achieved after continued investment in the digital business.

¹Refer to the Exceptional items section on for further details on these items.

Financial Review (continued)

Operating Profit

In 2014 the Group posted its first statutory operating profit since 2012, reporting a statutory operating profit of £10.7 million, a £256.3 million improvement on 2013. Underlying operating profit grew by 2.8% year-on-year, to £55.5 million from £54.0 million. We have benefited from a reduction in depreciation. The depreciation cycle has reached its low point in 2014, and will rise in 2015 off the back of digital investment in 2013 and onwards.

Despite underlying profit growth, the trading environment in 2014 remained challenging. Total underlying Group revenues were down £12.3 million to £265.9 million, a decline of 4.4%. The revenue declines were mitigated by cost reductions, with underlying operating costs reducing from £224.2 million to £210.4 million, a year-on-year underlying reduction of 6.2%. Our gross margin remains strong and grew from 19.4% to 20.9% on an underlying basis for the year.

Exceptional Items

In addition to the trading results discussed above, a number of items have been identified as exceptional either due to the size or nature of the item. Total exceptional operating expenses from continuing operations were £44.7 million (2013: £309.5 million). Refer to Note 7 - Exceptional Items and Note 10 - Finance costs for further information on the exceptional items. The exceptional items comprise:

· £24.5 million of impairments and write-downs on publishing titles, property and assets held for sale was recorded in 2014 (2013: £270.8 million).

· £10.9 million on restructuring and other costs designed to reduce staff costs and enable operating efficiencies (2013: £32.0 million).

· £4.6 million for one-off retention and incentivisation plans for senior managers, one-off strategic performance bonus for Executive Directors and the Value Creation Plan for the Executive Directors (2013: £nil).

· £3.3 million net charge on pension related expenses including the PPF levy of £2.0 million (2013: £6.3 million).

· £2.3 million on professional fees and aborted and other disposal costs (2013: £0.5 million).

· A £0.9 million gain was recorded on the sale of press equipment and two significant property sales (2013: £0.2 million).

Exceptional financing costs totalling £9.1 million have been recognised in 2014, relating to the refinancing of the Group. The exceptional financing costs, which were largely reported at the half-year, comprise:

· £7.1 million of term debt issue costs representing the remaining term debt issue costs after amortisation at the date of repayment; and

· £11.1 million of refinancing fees relates to legal and professional fees associated with the recent refinancing that were attributable to the equity and bond issue, the new revolving credit facility, the repayment of former lending banks and noteholders and the new pension framework agreement; less

· £9.2 million interest accrual release, which includes the release of the Payment-In-Kind (PIK) accrual of £25.7 million less £6.4 million PIK payment and £10.1 million'Make-Whole'interest paid due to early debt repayment to Noteholders.

Exceptional revenue of £10.0 million was recognised in 2013, in relation to the termination of the News International contract. There is no exceptional revenue reported in 2014.

All exceptional items involved cash outflows for the Group in 2014 other than the £24.5 million of write-downs on publishing titles, property, plant and equipment and assets held for sale and the £2.0 million gain on debt extinguishment included within the £9.1m of exceptional finance costs. Further details are included in the cash flow statement and notes and in Note 6 to the financial statements.

Financial Review (continued)

Finance Income and Costs

Net finance costs for the 53 week period ended 3 January 2015 were £34.6 million (including exceptional finance costs), a decrease of £11.2 million or 24.4% year-on-year, primarily due to the refinancing of the Group. The reduction in finance costs can be attributed to a £8.6 million reduction in loan interest charges, with interest costs reducing from £39.8 million in 2013 to £31.2 million in 2014, £8.3 million of one-off refinancing costs incurred, a £5.0 million fair value mark-to-market gain on borrowings and a £5.7 million decrease in other finance costs including pension finance costs. Note the mark to market reflects movements in the bond price relative to par.

Refer to Note 16 - Borrowings for further information.

Loss Before Tax

The Group's loss before tax from continuing operations was £23.9 million (2013: £291.4 million). The significant difference between 2014 and 2013 was the exceptional expense recognised in 2013 of £300.2 million (2013: £300.5 million reported exceptional items has been restated for discontinued operations and the adoption of IAS19R and restatement of pension accruals).

Tax Rate

The statutory tax credit of £8.6 million (2013: £75.7 million tax credit) comprises a current tax credit of £0.7 million (2013: £0.7 million charge) and a deferred tax credit of £7.9 million (2013: £76.4 million tax credit).

The tax credit of £8.6 million for the period was primarily attributable to the recognition of the tax benefit arising on the impairment write down on intangible publishing title assets of £6.0 million and the release of a tax provision of £0.6 million.

Financial Review (continued)

The Group's effective tax rate was 35.9% for the 2014 financial year and 26.0% for its 2013 financial year. The 21.5% basic tax rate applied for the 2014 period was a blended rate due to the tax rate of 23.0% in effect for the first quarter of 2014, changing to 21.0% from 1 April 2014 under the section 6 of the Finance Act 2013. Refer to Note 11 in the financial statements for further detail.

Earnings Per Share and Dividends

Basic loss per share from continuing operations was 0.44p, compared with a loss per share of 90.79p in 2013. 

The rights issue and subsequent share consolidation distorts the EPS metrics. For information, underlying and proforma calculations are presented below:

Proforma underlying earnings equate to net profit of £27.1 million (28 December 2013: £13.2 million) less preference share dividends of £0.15 million (2013: £0.15 million).

Proforma fully diluted EPS has been calculated based on the closing number of shares in issue of 105.9 million (refer to Note 19) and deducting the number of shares held by the Company's Employee Benefit Trust of 0.5 million. Proforma fully diluted EPS assumes the maximum potential dilutive impact and the maximum number of shares the Group could be called upon to issue to satisfy the full vesting of VCP and employee share and deferred bonus schemes. 

Financing

The Company announced on 23 June 2014 that it had successfully completed its Capital Refinancing Plan (announced on 9 May 2014). Gross proceeds of £140.0 million were received by the Company in connection with the Placing and the Rights Issue, and further to the announcement made by the Company on 14 May 2014, gross proceeds of £220.5 million were received from the offering of £225.0 million 8.625% senior secured notes due 2019. The notes were issued at a discount of £4.5 million.

All amounts previously outstanding were repaid and or cancelled in full and, as at 23 June 2014 the Company paid in total £332.9 million including the residual balance of PIK interest and Make-Whole, and the interest accrued to 23 June 2014 amounting to £5 million.

In addition, under the Capital Refinancing Plan the Company entered into a four year and six months (expiring 23 December 2018) £25 million New Revolving Credit Facility which currently remains undrawn.

Professional and legal fees associated with the refinancing have been incurred, totalling £21.1 million. The fees relate to £9.2 million of equity related costs (refer to Note 28 - Share premium), £7.1 million of bond issuance costs written off, £4.0 million relating to legal and professional fees attributable to the bond issue, the repayment of lending banks and noteholders and the new pension framework agreement. The £0.8 million fee for the revolving credit facility has been capitalised. Refer to Note 10b - Finance costs for a breakdown of the items charged to Exceptional finance costs, (refer to Note 7 - Exceptional items.

Cashflow and Net Debt

Net cashflow generated from operating activities was £7.8 million (2013: £51.7 million), including £6.3 million of annual pension contributions,£8.2 million of one-off pension contributions, £10.6 million of redundancy costs and payables of £9.7 million. The Group also received £10.0 million from News International for the termination of the print contract in 2013. After adjusting for these one-off items, the Group generated cashflows from operations of £30.6 million (2013: £34.7 million). Refer to Note 21 for further details. The Group maintains tight control over capital expenditure with £8.7 million spent (refer to Capital expenditure section below for further details), while proceeds received from the disposal of surplus assets (primarily property sales, surplus press equipment) were £8.0 million. The net cash consideration from the sale of the Irish business was £5.9 million.

Cash generated through the issuance of bonds and capital injection from the placing and rights issue totalled £360.5 million. This was used to repay bank borrowings and loan notes totalling £326.5 million. Cash interest payments of £27.0 million were made, £21.1 million paid on refinancing fees (refer to Note 10 b), and a further £1.9 million to the Johnston Press defined benefit pension trust as part of the refinancing (included within the total pension funding contributions within Note 21).

Financial Review (continued)

Cashflow and Net Debt (continued)

Following the refinancing, our interest charges on gross debt are 8.625% (2013: 11.7%, average interest rate). The Group's net debt position has improved significantly compared to previous periods with fair value net debt of £184.6 million at 3 January 2015 (2013: £302.0 million), a reduction of £117.4 million from the prior year. Excluding the mark-to-market on the bond and day one discount, totalling £9.6 million, the Group's net debt was £194.2 million at 3 January 2015 (2013: £304.4 million).

Discontinued Operations

As disclosed at the half year, on 1 April 2014 the Group announced and completed the disposal of the Republic of Ireland titles to Iconic Newspapers, for cash consideration of £7.1 million (proceeds net of disposal costs was £5.9 million). The assets had been written down at 28 December 2013 in anticipation of the disposal and no further profit or loss has been recorded in the current period for the disposal. Refer Note 14 for further details.

In accordance with IFRS 5 'Non-Current Assets Held for Sale and Discontinued Operations', the results and cash flows of this 'disposal group' are reported separately from the performance of continuing operations at each reporting date and comparatives have been restated.

The net profit from discontinued operations for the period ended 3 January 2015 was £0.2 million, including results from trading £0.1 million and net income of £0.1 million arising under the transitional services agreement (TSA). As part of the disposal, a TSA was agreed between the Group and Iconic Newspapers. The TSA provides for the provision of services such as pre-press, human resources, payroll, collections and information technology for varying periods of time.

Refer Note 12 in the financial statements for further information.

Net Asset Position

At the period end, the Group had net assets of £199.9 million, an increase of £99.6 million on the prior year. The movement in the net asset position from the prior year includes: £108.0 million reduction in borrowings following the Group restructuring; £22.9 million reduction in trade and other payables largely due to a reduction in restructuring provisions held at the end of 2013. These were partially offset by a £11.7 million increase in the deficit on the defined benefit plan as the actual return on assets was lower than expected and a £27.0 million reduction in publishing title intangible assets following the sale of the Irish publishing titles and the further impairment of publishing titles by £21.6 million, offset by the deferred tax liability which has reduced by £12.0 million due to intangible asset write-downs and pension deficit increase.

Pensions

At 3 January 2015, the Group's defined benefit pension scheme had a deficit of £90.0 million (including IFRIC 14) as measured under IAS19 Employee Benefits (Revised). This compares to a scheme deficit of £78.3 million as at 28 December 2013. The increase of £11.7 million in the scheme deficit is due principally to a fall in the net discount rate applied to the scheme liabilities and the recognition of an additional liability of £3.0 million as required under IFRIC 14 (refer to Note 18 'Retirement Benefit Obligation' for further details).

The trustees of the Johnston Press defined benefit pension scheme and the Group concluded the pension scheme's triennial valuation on 31 December 2012 and agreed a schedule of cash contributions of £6.3 million in 2014, £6.5 million in 2015 and £10.0 million in 2016 increasing by 3% per annum with a final payment of £12.7 million in 2024. Refer to Note 18 'Retirement Benefit Obligation' for further details.

IAS19 Employee Benefits (Revised) was adopted for the period ended 3 January 2015 with comparatives restated. The amendments to IAS19R have impacted the presentation of pensions related gains and losses in the income statement and statement of comprehensive income. For the restated period ended 28 December 2013, using the same discount rate for assets and liabilities as required by IAS19R reduced the level of pension income that was recognised in the income statement leading to a higher net expense of £3.9 million.

The Group is also subject to the Pension Protection Fund Levy (PPF). The levy is charged annually and runs from 1 April to 31 March. The amount payable for 2014/2015 is £3.2 million. The Group has entered into a flexible apportionment arrangement with the agreement of the Plan Trustees which will result in a decrease in the 2015/2016 PPF levy charge. The Group expects to see the full benefit of reduced levy charges in 2016/2017, when the increased pension contributions commence.

In 2015, the first £2.5 million of any levy reduction is paid to the deficit plan. The contribution levels agreed as part of refinancing potentially give rise to an IFRIC 14 fund surplus as contributions agreed are greater than the level of the deficit recorded. In practical terms the Group believes a degree of flexibility exists in negotiating with the pension trustees to reset contribution levels in the medium term to reflect changes in the funding position. Legal opinion has been obtained indicating no unconditional right to the repayment of the surplus under the rules however the Trustees have discretion and 'may' repay any surplus in certain circumstances. As at 3 January 2015, the Group was liable to an IFRIC 14 liability of £90.0 million which led to the additional £3.0 million liability recognition.

Financial Review (continued)

Pensions (continued)

Since June 2014 the Plan has been invested in leveraged LDI funds which have provided protection against around 40% of the interest rate risk associated with the Plan's liabilities. This has reduced the Plan's exposure to declines in interest rates over the period invested.

Capital Expenditure

In the financial periods ended 3 January 2015 and 28 December 2013, the Group incurred capital expenditure of £8.7 million and £7.3 million respectively. Of this, £5.2 million was spent on infrastructure including leasehold improvements of £1.9 million (2013 infrastructure spend: £4.3 million) and £3.5 million on developing the digital platforms (2013: £3.0 million).

Financial Reporting

The IFRS standard changes applicable in 2015 are not expected to have a material impact on the financial statements of the Group in future periods. Additional details on changes in the standards are included in Note 2 to the financial statements.

Factors Affecting Future Group Performance

The performance of the Group will continue to be affected by the economic conditions in our markets, cyclical conditions, structural and business specific circumstances and trends in employment, property transactions, new car sales and the levels of consumer confidence.

However, the outlook for the Group will also depend on a number of other factors, including:

· growing new revenues (particularly digital) in the Group's existing market segments;

· ability to adapt to customer requirements through new sales propositions and advertising channels;

· continually improving existing efficient operations through technology infrastructure and improved processes; and

· further re-engineering of the cost base of the business.

Liquidity and Going Concern

Following the placing and rights issue, the Group now has gross debt of £225.0 million. Cash on balance sheet at 3 January 2015 was £30.8 million, and the Group has access to a £25.0 million revolving credit facility (RCF) which remains undrawn. The bond (Senior Secured notes) has a five-year maturity due 2019, and the Group's RCF matures on 23 December 2018.

The Group's policy is to ensure it has committed funding in place sufficient to meet foreseeable peak borrowing requirements.

Based on its review, and after considering reasonably possible downside sensitivities, the Board is of the opinion that the Group has adequate financial resources to meet operational needs for the foreseeable future, and have concluded that it is appropriate to prepare the financial statements on a going concern basis.

Directors' Responsibility Statement

We confirm to the best of our knowledge:

The responsibility statement below has been prepared in connection with the Company's full annual report for the year ending

3 January 2015. Certain parts thereof are not included within this announcement.

1. The Consolidated Financial Statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

2. The Chairman's Statement, Chief Executive's Report, Operational Review and Financial Review, include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

This responsibility statement was approved by the board of directors on 25 March 2015 and is signed on its behalf by:

Group Income Statement

For the 53 week periodended 3 January 2015

1.The adoption of IAS19R and the correction of a prior year over accrual has affected the measurement and presentation of pension related

gains and losses. Refer to Accounting policies section and Note 18 for further details.

2.Comparative income statement information has been restated to show the Republic of Ireland business as a discontinued operation due to its

disposal on 1 April 2014.

3.Items which are deemed to be exceptional by virtue of their nature or size. Refer to Note 7 for further details.

The accompanying notes are an integral part of these financial statements. The comparative period is for the 52 week period ended 28 December 2013.

Group Income Statement

For the 53 week periodended 3 January 2015(continued)

1.The adoption of IAS19R and the correction of a prior year over accrual has affected the measurement and presentation of pension related

gains and losses. Refer to the Accounting policies section and Note 18 for further details.

2. Comparatives restated to show additional bonus and rights issues totalling 4,603,565,483 following the Group's announcement on 23 June

2014 of the Capital Refinancing Plan and shortly thereafter a share consolidation of every 50 ordinary shares into one new ordinary share.

Refer to Note 19 and the Financial Review section for further details.

Group Statement ofComprehensive Income

For the 53 week periodended 3 January 2015

Group Statement ofChanges in Equity

For the 53 week periodended 3 January 2015

The accompanying notes are an integral part of these financial statements.

Group Statement ofFinancial Position

At 3 January 2015

1.The adoption of IAS19R and the correction of a prior year over accrual has affected the measurement and presentation of pension related

balances. Refer to the Accounting policies section and Note 18 for further details.

The financial statements of Johnston Press plc, registered in Scotland (number 15382), were approved by the Board of Directors and authorised for issue on 25 March 2015.

They were signed on its behalf by:

The accompanying notes are an integral part of these financial statements.

Group Cash Flow Statement

For the 52 week periodended 3 January 2015

1Includes exceptional cash receipts of £nil milllion (28 December 2013: £10.0 million) due to the termination of the News International printing

contract in 2013.

2Share option and share warrant exercises generated a net cash inflow of £658,000. Issue of share capital generated £594,000 and issue of

share premium generated £64,000. Also includes proceeds from fractional shares of £4,000 (refer Note 20 for further details).

The comparative period is for the 52 week period ended 28 December 2013.

The accompanying notes are an integral part of these financial statements.

Notes to the Condensed ConsolidatedFinancial Statements

For the 53 week periodended 3 January 2015

1. General information

The financial information in the Preliminary Results Announcement is derived from but does not represent the full statutory accounts of Johnston Press plc. The statutory accounts for the 52 week period ended 28 December 2013 have been filed with the Registrar of Companies and those for the 53 week period ended 3 January 2015 will be filed following the Company's Annual General Meeting in 2015. The auditor's reports on the statutory accounts for the 52 and 53 week periods ended 28 December 2013 and 3 January 2015 were unqualified, however the report on the 52 week period ended 28 December 2013 did include an emphasis of matter regarding a material uncertainty in relation to going concern. Neither report contained a statement under Sections 498 (2) or (3) of the Companies Act 2006.

The condensed consolidated financial statements of Johnston Press Plc have been prepared on a going concern basis (discussed further in the Financial Review) and under the historical cost convention, except for the revaluation of certain properties and financial instruments, share-based payments and defined benefit pension obligations that are measured at revalued amounts or fair value at the end of each reporting period. The accounting policies adopted in the preparation of this condensed consolidated financial statement are consistent with those applied by the Group in its audited consolidated financial statements for the period ended 3 January 2015.

Whilst the financial information included in this Results Announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. This Results Announcement constitutes a dissemination announcement in accordance with Section 6.3 of the Disclosure and Transparency Rules (DTR). The 2014 Annual Report and Accounts for the 53 weeks ended 3 January 2015 will be made available on the Company's website at www.johnstonpress.co.uk, at the Company's registered office at Orchard Brae House, 30 Queensferry Road, Edinburgh, EH4 2HS and sent to shareholders in April 2015.

2. Basis of preparation

The Group's business activities, together with factors likely to affect its future development, performance and financial position and commentary on the Group's financial results, its cash flows, liquidity requirements and borrowing facilities are set out in the Financial Review on pages 11 to 20.

The financial statements have been prepared for the 53 week period ended 3 January 2015. The 2013 information relates to the 52 week period ended 28 December 2013.

3. Adoption of new or amended standards and interpretations in the current year

The following new and amended IFRSs have been adopted for the 53 week period which commenced 29 December 2013 and ended 3 January 2015.

3. Adoption of new or amended standards and interpretations in the current year (continued)

The following describes narrow scope amendments applicable for annual periods beginning on or after 1 January 2014 but which have been early adopted in the financial statements for the 53 week period commencing 29 December 2013 and ending 3 January 2015.

New and amended IFRS issued by the IASB but not yet effective for the 53 week period ended 3 January 2015

The following standards and interpretations are applicable to companies with periods beginning during 2014 and which were endorsed by the EU in December 2014. These will be mandatory for Johnston Press plc in the 52 weeks ended 2 January 2016. Earlier application is permitted.

3. Adoption of new or amended standards and interpretations in the current year (continued)

New standards applicable to accounting periods beginning after 2015

4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty

Critical judgements in applying the Group's accounting policies

In the process of applying the Group's accounting policies, management has made the following judgements that have the most significant effect on the amounts recognised in the financial statements (apart from those involving estimations, which are dealt with below).

The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Exceptional items

Exceptional items include significant transactions such as the costs associated with restructuring of businesses along with material items including for example revenue received on the termination of significant print contracts, significant pension related costs, the disposal or exit of a significant property directly linked to restructuring and impairment of intangible and tangible assets together with the associated tax impact. The Company considers such items are material to the Income Statement and their separate disclosure is necessary for an appropriate understanding of the Group's financial performance. These items have been presented as a separate column in the Group Income Statement.

4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty (continued)

Provisions for onerous leases and dilapidations

Where the Group exits a rented property, an estimate of the anticipated total future cost payable under the terms of the operating lease, including rentals, rates and other related expenses, is charged to the Income Statement at the point of exit as an onerous lease. Where there is a break clause in the contract, rentals are provided for up to that point. In addition, an estimate is made of the likelihood of sub-letting the premises and any rentals that would be receivable from a sub- tenant. Where receipt of sub-lease rentals is considered reasonable, these amounts are deducted from the rentals payable by the Group under the lease and provision charged for the net amount.

Under the terms of a number of property leases, the Group is required to return the property to its original condition at the lease expiry date. The Group has estimated the expected costs of these dilapidations and charged these costs to the Income Statement. No discounting has been applied to the provision as the effect of the discounting is not considered material.

Valuation of share-based payments

The Group estimates the expected value of equity-settled share-based payments and this is charged through the Income Statement over the vesting periods of the relevant awards. The cost is estimated using a Black-Scholes valuation model. The Black-Scholes calculations are based on a number of assumptions and are amended to take account of estimated levels of share vesting and exercise.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the period end date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Impairment of publishing titles and print presses

Determining whether publishing titles are impaired requires an estimation of the value in use of the cash generating units (CGUs) to which these assets are allocated. Key areas of judgement in the value in use calculation include the identification of appropriate CGUs, estimation of future cash flows expected to arise from each CGU, the long-term growth rates and a suitable discount rate to apply to cash flows in order to calculate present value. The Group has identified its CGUs based on the seven geographic regions in which it operates. This is considered to be the lowest level at which cash inflows generated are largely independent of the cash inflows from other groups of assets and has been consistently applied in the current and prior periods. £21.6 million impairment loss has been recognised for the period ended 3 January 2015 (28 December 2013: £202.4 million). The carrying value of publishing titles at 3 January 2015 was £511.6 million (28 December 2013: £538.5 million). Details of the impairment reviews that the Group performs are provided in Note 15.

Determining whether print presses are impaired requires an estimation of the value in use of each print site. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the print sites and a suitable discount rate in order to calculate present value (Note 15).

Valuation of pension liabilities

The Group records in its Statement of Financial Position a liability equivalent to the deficit on the Group's defined benefit pension schemes increased where appropriate to include an estimate for the present value of agreed future contributions as required under IFRIC 14. The pension liability is determined with advice from the Group's actuarial advisers each year and can fluctuate based on a number of factors, some of which are outside the control of management. The main factors that can impact the valuation include:

• the discount rate used to discount future liabilities back to the present date, determined each year from the yield on corporate bonds;

• the actual returns on investments experienced as compared to the expected rates used in the previous valuation;

• the actual rates of salary and pension increase as compared to the expected rates used in the previous valuation;

• the forecast inflation rate experienced as compared to the expected rates used in the previous valuation; and

• mortality assumptions.

Details of the assumptions used to determine the liability at 3 January 2015 are set out in Note 18.

5. Business Segments

Information reported to the Chief Executive Officer for the purpose of resource allocation and assessment of segment performance is focused on the two areas of Publishing (in print and online) and Contract Printing. Geographical segments are not presented as the primary segment is the UK which is greater than 90% of Group activities.

6. Segment Information

a) Segment revenues and results

The following is an analysis of the Group's revenue and results by reportable segment:

1 The adoption of IAS19R and the correction of a prior year over accrual has affected the measurement and presentation of pension related

gains and losses. Refer to the Accounting policies section and Note 18 for further details.

2Inter-segment sales are charged at standard internal charging rates.

3Relates to changes in fair value of borrowings, changes in fair value of hedges, retranslation of USD and retranslation of Euro-denominated

debt.

The accounting policies of the reportable segments are the same as the Group's accounting policies. The segment result represents the (loss)/profit earned by each segment without allocation of the share of results of associates, investment income, finance costs (including in relation to pension assets and liabilities) and income tax expense. This is the measure reported to the Group's Chief Executive Officer for the purpose of resource allocation and assessment of segment performance.

b) Segment assets

For the purposes of monitoring segment performance and allocating resources between segments, the Group's Chief Executive Officer monitors the tangible, intangible and financial assets attributable to each segment. All assets are allocated to reportable segments with the exception of derivative financial instruments.

6. Segment Information (continued)

c) Other segment information

7. Exceptional Items

1The adoption of IAS19R and the correction of a prior year over accrual has affected the measurement and presentation of pension related gains and losses. Refer to the Accounting policies section and Note 18 for further details.

2Comparative income statement information has been restated to show the Republic of Ireland business as a discontinued operation due to its disposal on 1 April 2014.

Revenue

In 2013, the Group recognised revenue of £10.0 million from the termination of a long-term printing contract with News International following its closure of News of the World in 2012. There is no exceptional revenue reported for the year ended 3 January 2015.

Operating expenses - pensions

Plan expenses in 2014 comprise £0.4 million additional administration expenses incurred in connection with refinancing (2013: £nil).

During 2014, the pension regulator has requested payment of Pension Protection Fund levy of £2.7 million for the year ending 31 March 2015 (2013: £3.1 million and £3.2 million for the years ending 31 March 2013 and 31 March 2014 respectively). The pension levy was charged at the capped rate, reflecting historic high gearing. The charge has fallen to £2.7 million and is expected to reduce as reduced gearing and flexible apportionment is reflected in the levy assessment.