SHARES in Johnston Press fell by three per cent yesterday as the publisher of The Scotsman reported a 31 per cent fall in pre-tax profits for the first six months of this year.

The business, which last month announced that it would be cutting a “significant” number of jobs - believed to be 25 - from its Scottish weekly titles, said revenues fell by three per cent to £102.9 million while profits were down from £9.7m to £6.7m.

Much of the fall is down to a significant reduction in classified revenues, which fell by 28.9 per cent from £24.3m to £17.3m.

Despite this, chief executive Ashley Highfield said the business had been bolstered by a near 15 per cent increase in digital advertising revenues to £10m as well as strong performance from the i newspaper.

Johnston Press paid £24m to buy the i from London Evening Standard owner ESI Media in April 2016.

“Digital revenues excluding classifieds have outweighed the declines of print advertising revenues, helped by an editorial focus that has resulted in digital audiences at a record high and by a fantastic performance from the i newspaper, which has achieved significantly enhanced performance during the 16 months since acquisition,” Mr Highfield said.

Advertising revenues still account for the bulk of the company’s income at £52.5m, although that figure was 12 per cent lower than the £59.5m that came from advertising in the same period last year.

Within that, print advertising excluding classifieds fell by five per cent while digital advertising excluding classifieds increased by 15 per cent.

Income from newspaper sales, meanwhile, increased by eight per cent, from £36.6m to £39.5m.

Mr Highfield said that trading conditions across the industry “continue to be difficult, especially in classified advertising”.

“Encouragingly, whilst print advertising revenues will continue to decline, we are seeing the monetisation of our growing digital audience gain momentum, which combined with the transformation of our products - including targeted advertising and sponsored content - in 2016 has seen digital display advertising up 25 per cent year on year across June and July,” he added.

The group is currently working with its financial and legal advisers to come up with a way of refinancing £220m of loan notes that are due to be repaid in June 2019. It is expected to announce alternative arrangements in due course.