11 Nov 2009 07:00
| For Immediate Release | 11 November 2009 |
Johnston Press plc
INTERIM MANAGEMENT STATEMENT
Johnston Press plc today publishes its Interim Management Statement which has been drawn up for the 44 weeks to 31 October 2009, being the last practicable date, as required by the UK Listing Authority's Disclosure and Transparency Rules.
At our half year results announcement on 28 August 2009 we reported that total advertising revenues for the first 26 weeks of the year were down by 32.7% on the equivalent period in the prior year, and that the trend had improved over the first 8 weeks of the second half and the rate of decline had slowed to 26.1%. This trend has continued with the last 10 weeks only down by 19.1% such that the first 18 weeks of the second half of the year have seen a total advertising decline of 22.1%. The greater stability in advertising revenues we referred to in the half year announcement has continued with the average weekly advertising revenues in September and October being at the same level as in May and June, with improvements in the property market offsetting a continued decline in recruitment related revenues.
In addition to the significant cost reductions made by the Group in the second half of 2008 and the first half of 2009, we expect further progress to be made with a yearߛonߛyear reduction for the full year to be around £50m.
During the month of October, the Group announced the closure of two printing operations, one in Kilkenny, Republic of Ireland and the other in Edinburgh, Scotland. The impacted titles will be moved to either third parties or other group presses allowing increased colour, as well as cost reductions in 2010. There will be increased redundancy costs from those previously anticipated such that the cash exceptional costs for the year will be close to £12m. These closures will also result in a write-off totalling £20m being the book value of the presses on these sites.
The business continues to be cash generative, however, there is limited scope for debt reduction in the second half of the year. This is as a result of the £15m fees on the refinancing which were payable on signing, the exceptional costs noted above and the increased interest costs.
Given the greater stability in advertising revenues, combined with reducing declines in circulation revenues and continued progress with cost savings, the Group is confident of delivering an operating profit in line with current market expectations for 2009.
Contact:
| John Fry, Chief Executive or Stuart Paterson, Chief Financial Officer Johnston Press plc Tel: 0131 225 3361 | Richard Oldworth/Suzanne Brocks/ Christian Goodbody Buchanan Communications Tel: 020 7466 5000 |
The Interim Management Statement may contain forward looking statements which; have been made by the Directors in good faith based on the information available to them at the time of their approval of the Statement; and Should be treated with caution due to inherent uncertainties, which are beyond Johnston Press' ability to control or estimate precisely and include both economic and business risk factors, underlying such forward looking information.