SHARES in Johnston Press, publisher of the Scotsman and Yorkshire Post newspapers, plunged 8% as news of a 16.1% fall in revenues for the past four months overshadowed a report of moderating declines in advertising revenue and the prospect of gains in circulation income.

Edinburgh-based Johnston Press, which is restructuring after being squeezed between a tough advertising market and its debt load following the credit crunch, said in the 18 weeks to November 3, circulation revenues fell 5.1% year-on-year and there was a 16.3% drop in advertising income.

The company, which has made nearly 700 people redundant this year, said full year like-for-like cost savings for 2012 were likely to come in at £30 million, £5m ahead of expectations.

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It has relaunched 54 paid-for titles, turned five daily titles weekly and closed several free newspapers.

Johnston Press's chief executive Ashley Highfield, who joined from Microsoft a year ago, said: "The second half of 2012 has seen acceleration in the implementation of the strategy for the business.

"While market conditions have been even tougher than expected, we have made good progress in restructuring our operations, reducing the cost base, maintaining focus on debt reduction and continuing to invest in growth areas."

Mr Highfield, a former BBC executive, said Johnston Press expected to see circulation revenues rise in the fourth quarter.

This would be the first increase since 2007.

On a like-for-like basis revenues fell 11.4%.

Its net debt stands at £336m, having fallen from £351.7m at the start of the year after the company spent £11.7m on refinancing costs and saw a £13.8m cash impact from restructuring.

Johnston Press's shares closed at 11p, down 1p.

Despite its focus on restructuring, Johnston Press is seen as a potential player in renewed consolidation in the newspaper market.

This has been sparked by reports that Daily Mail & General Trust is in discussions to sell its regional arm Northcliffe Media to a vehicle fronted by the former Mirror Group chief executive David Montgomery.