Local and regional newspapers will still be appearing in 20 or 30 years time, Johnston Press chief executive Ashley Highfield said in an upbeat assessment of the future for local media.

Mr Highfield told shareholders at the annual meeting in Edinburgh that he expected Johnston to return to profit this year as digital revenues continued to grow across its 250 UK titles.

He also revealed that a recent payment by News International to exit a printing contract following the closure of the News of the World amounted to a £40 million windfall for the group.

"Not only did we receive cash from Mr Murdoch we have also managed to win new business for the freed-up capacity," Mr Highfield said.

But chairman Ian Russell warned that newspaper regulation prompted by misdemeanours in some sections of the press, whether UK-wide or in Scotland, should not punish local media.

Johnston converted many daily titles to weeklies and cut 1300 jobs or one-quarter of the group's workforce in 2012, but Mr Highfield said he was confident that circulation declines could be limited to "low single digit" percentages. "That means we will still be printing every one of our paid-for titles in 20 or 30 years time.

"We already do some very low print runs of one to three thousand and they are profitable."

Management in Edinburgh this week told staff of its plans to cut 20 of the 90 editorial posts at the Scotsman and Scotland on Sunday.

On the future of the group's Edinburgh titles, Mr Russell said they were "all extremely important to us" and would be included in the "refreshing" of all the group's titles and websites expected by the end of June.

Mr Highfield said Johnston's 5.7% profit decline last year compared with 20% a year from 2006 to 2010.

He added: "I hope and expect 2013 to be the first year in many years we actually get back to profit growth."

The company's main goal was to match last year's £32m debt reduction, in pursuit of a £25m rebate from its banks next year and lower servicing costs.

The former BBC and Microsoft executive, who was paid £700,000 in his first full year in charge, said he had replaced 23 managing directors in "five feudal fiefdoms" at Johnston with eight MDs, and had cut printing presses from seven to three.

He said the group's recently relaunched titles had reversed circulation declines with increases of 5% to 6.5%. Johnston's overall audience had risen by 11% last year, he said – "more than compensating for the decline in newspaper circulation with growth in digital audience" – with online display advertising revenues up 39%, and the proportion of audience "consuming by mobile" jumping from 5% to 25% in a year.

"There has been a tremendous shift – a third of our audience will consume us through print, a third online through computers, and a third through mobile."