PUBLISHING group Johnston Press is nearing an online "tipping point" where the decline in print revenues will be more than offset by soaring digital sales, its chief executive has said.
"We're not far off, I would look to 2015," said Ashley Highfield. "We're seeing a continued upward trend in advertising that's helped by digital, but it's also a levelling off of print declines."
However, the head of the Edinburgh-based group said he has not finished cutting costs within the business. "We're not having to go at it in the same way as we were in 2012 ... but I don't think we're ever going to stop that process," he said yesterday, adding that the pace of savings would slow this year to about £15 million.
His comments came as Johnston posted a 4.3 per cent fall in underlying revenues to £135.8 million for the first six months of the year. While this is a slower downward pace than the 5.3 per cent decline this time last year, Johnston is nevertheless turning over barely half the amount it reported for the same period five years ago.
Johnston, whose publications include the Scotsman, the Edinburgh Evening News and the Yorkshire Post, said pre-tax profits jumped from £2.1 million in the year-ago period to £6.1 million.
The figures exclude one-off changes such as a major refinancing earlier this year and the sale of Johnston's titles in the Republic of Ireland.
Including one-off items, losses before tax narrowed from £254 million a year ago to £6.3 million.
Print advertising, which still represents around half of the company's turnover, fell by an underlying 8.7 per cent to £70.8 million.
Digital advertising, meanwhile, soared 23.4 per cent higher to £14.1 million. Bookings for property, jobs and car advertisements all increased.
The firm's publications attracted 18 million online readers in July, up 44 per cent on a year ago. Analysts credited some of the jump to major sporting events including the Tour de France and the Commonwealth Games. Mobile users now make up 46 per cent of the group's digital traffic.
Johnston Press issued £225 million in bonds and raised a further £140 million through a share placing and rights issue in May, cutting its debt pile by a third to £181.6 million and lowering its subsequent interest payments from £36 million a year to around £20 million.
Mr Highfield said yesterday that investors had been "tremendously supportive" since the refinancing. "I want to return that faith in me by increasing the share price in the coming months and years."
The chief executive said the decision last month to move managerial responsibility for the firm's Scottish papers to England as part of the ongoing overhaul had so far been well-received.
"They will be getting a bit more focus and attention than they would have been," he said, adding that a redesign of the Scotsman website will be launched before the end of the year.
The firm cut £7.1 million from its costs through job losses, office moves and other initiatives during the first six months of the year. Overall costs fell to £107.5 million while the group's operating margin increased to 20.9 per cent compared with 19.3 per cent in the first half of 2013.
Overall the company said it was upbeat about the direction of the industry. "The economy is continuing to improve and the ripple-out effect from London and the South East is beginning to show in the numbers in Scotland, Yorkshire and Northern Ireland," it said in its results statement.
"There is a real momentum gathering pace within the group, with innovation and creativity at the heart of new launches."
London-listed shares in the company closed 0.02p higher at 4.22p yesterday.
Jonathan Helliwell, an analyst at Panmure Gordon, said the results were slightly ahead of his forecasts.
"Looking through the 'noise' associated with the recent refinancing the first half numbers show solid progress across the board," Mr Helliwell wrote in a research note.