Note of caution from press group

Dec 13 2007 by Peter McCusker, The Journal

NEWSPAPER group Johnston Press maintained its recent trading improvement, but urged a “degree of caution” about prospects for 2008.

Johnston, which publishes 18 daily newspapers and 291 weekly titles, said advertising revenues increased by 0.2% in the five months to November 30, with like-for-like UK print advertising revenues showing a fall of 0.8%.

During the first six months of the year, the equivalent figures showed reductions of 1.5% and 2.9% respectively.

The company said Ireland’s slowing property market caused advertising revenues in the country to decline by 1.2%, compared to growth of 10% in the first six months.

Overall, Edinburgh-based Johnston said it expected a “satisfactory outcome” for the financial year as a whole.

Johnston added: “Recent turmoil in world financial markets and the consequential effects on the domestic economy and consumer confidence must lead to a degree of caution when considering prospects for 2008.”

Shares fell 2% to 250.5p today as analysts noted the cautious guidance and the weaker trading picture in Ireland, where the company publishes titles including the Longford Leader and the Leinster Express.

Numis Securities said in a note: “The risk for 2008 is that the fragile advertising improvements delivered in 2007 are derailed by general UK economic weakness.”

Newspaper sales revenues grew on a like-for-like basis, with increased cover prices more than offsetting declines in circulation. Digital revenues grew 35.3% in the period, benefiting from increased investment committed at the start of the year. It operates 317 local websites.