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MORE BAD NEWS FOR JOHNSTON; Ads gloom for Scotsman publishers.

Byline: Scott McCulloch

NEWSPAPER publishers Johnston Press have reported a near 13 per cent drop in advertising revenue.

The firm, who publish The Scotsman and Scotland on Sunday, suffered a pre-tax loss of PS6.8million for the 2012 financial year.

That compared with a 2011 loss of PS143.8million after revaluing their titles from PS907million down to PS728million.

The publisher, who have a stable of around 250 papers, axed more than 1300 jobs - around a quarter of their staff - last year.

Print advertising revenue dropped almost 15 per cent to PS181.3 million, with overall newspaper sales shrinking by four per cent.

Advertising revenues continued to fall in the first 10 weeks of the new financial year, down 15.6 per cent on already diminished revenues a year ago.

The group said all advertising categories, with the exception of motoring, are now showing an improving trend.

In the last monthly ABC circulation figures reported for January, The Scotsman's circulation dropped 17.5 per cent on the previous year to 32,435 copies.

Scotland on Sunday's circulation fell by 24 per cent to 38,493.

National Readership Survey results for 2012 show the Scotsman's overall readership fell eight per cent.

The Scotland on Sunday readership was down 7.6 per cent to 146,000.

Johnston said digital revenues rose by 12 per cent last year to PS20.6million. But it wasn't enough to prevent a PS45.2million overall revenue decline. Operating profits came to PS57million, a near 12 per cent decline on the previous year.

The group benefited from a PS30million payment linked to the partial cancellation of a print contract with News International last year which they used to cut bank borrowing by PS32.3million to PS319.4million.

Pension liabilities also increased by PS17.3million to PS121million.

Paul Richards, a media analyst with Numis Securities, said Johnston Press's headline operation performance was below expectations.

He said: "Net debt of PS319million and a pension deficit of PS121million remain high relative to the PS57million of operating profit."

Shares in Johnston were down nearly four per cent to 0.13 pence at the close of trading yesterday, leaving the group valued at PS83.53million.

Johnston chief executive Ashley Highfield woud not rule out further job losses this year.

He said: "Good progress has been made in transforming the group in 2012 and the changes made provide a strong platform for us to build on in 2013."

'Good progress has been made in transforming the group' ASHLEY HIGHFIELD
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Publication:Daily Record (Glasgow, Scotland)
Geographic Code:4EUUK
Date:Mar 20, 2013
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