12th Dec 2006 07:01
Johnston Press PLC12 December 2006 For Immediate Release 12 December 2006 Johnston Press plc PRE-CLOSE TRADING UPDATE Johnston Press plc issues the following trading update relating to the secondhalf of the financial year ending 31 December 2006 and ahead of the Group'spreliminary results announcement scheduled for 7 March 2007. As anticipated at the time of the announcement of our half year results, therehas been no discernable improvement in the advertising environment other thanthat resulting from easier comparatives from the second half of 2005. For thefive months ended 30 November 2006 like-for-like print advertising revenuesdecreased by 8.0%. If the fast growing digital revenues were included thisdecline would reduce to 7.4%. The fall in employment revenues, which was 24.2% in the first half of this year,has reduced to 12.2%, reflecting easier comparatives. Difficult marketconditions and industry restructuring resulted in motors advertising continuingto experience double digit declines. The retail sector also continues to bechallenging. The one category still experiencing growth is property advertising,albeit at a slower rate as the comparatives get tougher. Newspaper sales revenue continues to grow on a like-for-like basis withincreased cover prices more than offsetting declines in circulation. The increase in organic digital revenues continued throughout the period despitereduced in-paper employment volumes, which through packaged selling have been asignificant driver of digital revenue growth. Value added services such as CVmatching and our online Local Business Directories continue to be popular withour advertisers. To further accelerate the rapid progress we are already makingin this area, the Group is proposing to spend an incremental £5.0m in 2007 onincreased marketing and development of our digital activities. The integration of last year's acquisitions continues to progress well and allare on track to meet our expectations as well as being earnings enhancing incalendar year 2006. The new printing facility at Dinnington, near Sheffield, is ramping up volumesahead of anticipated levels, which has allowed the Group to close an existingpress at Hartlepool which was not part of our original plan. Together with theclosure of two ageing presses in Northern Ireland, this will result in thenon-recurring costs for the year being nearer to £6.0m rather than theanticipated £4.0m indicated at the time of the half year results. In view of the accelerated closure of older equipment made possible by the newpress investment programme already exceeding expectations and reflecting reducedprint volumes, we plan to take a one-off, non-cash, depreciation charge of £9.0min the full year results. This anticipates a shortfall in sale proceeds fromredundant equipment compared to current net book values. Looking forward, the Board does not see any early indication of improvements inadvertising markets other than those coming from easier comparatives. However,2007 will benefit from the News International contract running on the new pressin Dinnington and this, together with the ongoing contribution from recentacquisitions and continued efficiency improvements, should help to mitigate theimpact of any continued weakness in advertising demand. Contact: Tim Bowdler, Chief Executive or Tel: 0131 225 3361Stuart Paterson, Chief Financial OfficerJohnston Press plcRichard Oldworth/Suzanne Brocks Tel: 020 7466 5000Buchanan Communications This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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