Johnston Press, the acquisitive owner of The Scotsman and Yorkshire Post newspapers, signalled yesterday that the advertising slump afflicting the sector had not cut publishers' valuations enough to send it on a buying spree.
Johnston Press, the acquisitive owner of The Scotsman and Yorkshire Post newspapers, signalled yesterday that the advertising slump afflicting the sector had not cut publishers' valuations enough to send it on a buying spree.
Shares in the company shed 3% on the day after its financial results for 2007 prompted investors to fret over falling advertising revenues with little sign of a short-term recovery.
Pre-tax profit of £137.4m at the Edinburgh-based publisher was at the upper end of market estimates but still down 6.3% on 2006. Revenue, 12% of which comes from its Scottish operations, was up 0.9% at £607.5m but this gain, the firm acknowledged, was entirely driven by acquisitions, digital revenues and printing contracts.
The big worry for investors was the 0.8% drop in advertising revenue in 2007 on a like-for-like basis with motor, display and employment ads particularly hard hit.
In Scotland, one of the biggest blows came from a 16% slump in employment advertising as public sector recruitment ads virtually dried up after the Scottish parliamentary elections were held.
The company, which publishes 318 papers including the Newsletter in Northern Ireland, two Sunday papers including the Scotland on Sunday, and a raft of weekly papers, also reported that property, which was strong last year, fell away in early 2008 as the number of transactions dropped. This contributed to a 4.3% drop in ad revenues in the first weeks of 2008.
Around 73% of Johnston Press's revenues come from advertising, with 92% of this from its traditional print publications despite an doubling of investment to £9m in its digital platforms in 2007.
Chief executive Tim Bowdler acknowledged that the advertising market continue to be tough.
The 2007 dividend rose 7.5% to 10p. The shares closed 5.5p lower at 182.75p.
