Still chugging through its malaise, Johnston Press has posted a huge loss for 2008 after slashing its own estimated value by half a billion pounds. Annual profits fell 27.9 percent to £128.4 million on 12.4 percent worse sales of £531.9 million and Johnston is writing down a whopping £511.4 million from the value of the company — £417.5 million on its newspapers — so it settles on a £429.3 million overall loss for 2008.
CEO John Fry says: “In the short term, there is little prospect of a turn in the advertising cycle and our expectation is for 2009 to be a very challenging year with revenues significantly below 2008 levels and only partially offset by lower costs.” Johnston’s ad revenue so far in 2009 is 35.9 percent down compared to Q108.
Advertising revenue overall dropped 17.1 percent in 2008 to £75.2 – but digital advertising continues to do well and rose 31.1 percent to £19.8 million in 2008. Monthly unique users grew by 48.8 percent and page impressions by 167.5 percent. Johnston says it has “ambitious” plans to grow its digital audience and revenues this year – we’ll stay tuned to exactly what this means.
– Advertising threat: CEO John Fry is worried that, as advertisers experiment more with digital, there is a risk that “eventual upswing will not be accompanied by a commensurate rise in advertising revenues”. So advertisers may migrate from print, bypass Johnston’s digital offerings and not come back when the recession ends, particularly with classifieds. He sees no evidence of this happening on a “widespread basis”, but print and digital property ads alone were down 54.8 per cent in December 2008 compared to a year ago at £7.3 million.
– Debt: Johnston is going in the right direction on debt: its net debt as of December 31 was £476.8 milllion, still a sizeable amount but £214.9 lower than a year earlier thanks to investment from Malaysian billionaire Ushaha Tegas and a rights issue. The level would have been £41 million lower still but for the weakness of Pound against the Euro. Johnston admits it need to either re-finance its debt or sell its Irish titles of face casting “significant doubt on the company