Losses fall at newspaper group as cost-cutting measures take effect

NEWSPAPER groupJohnston Press Ireland significantly reduced its losses last year as it continued a number of cost-cutting measures.

Pre-tax losses amounted to €3.9 million, compared with a loss of just over €6m in the previous year, according to the accounts for the year to the end of December last.

The accounts reveal that there was an exceptional non-recurring item of €5.4m, €4.1m of which relates to the writedown of assets following the closure of the Limerick print press and the cost of the remaining lease on the property.

There were also redundancy costs of €1.9m due to the closure of the print press and a management restructure in Ireland.

These costs were offset by a €552,000 gain on sale of previously written-down assets and a curtailment gain of €150,000 following the closure of the Limerick pension scheme to future accrual from November 2010, according to the accounts.

If these expenses had not been incurred, the profit before tax for the period would have amounted to €1.5m, compared to a loss before tax of €20,000 in the previous year.

Total revenues fell by 24.6% at Johnston Press to €23.1m, mostly due to a “continued decline in print advertising revenues”, which the company said was as a direct result of the continuing economic issues faced by Ireland.

However, digital revenues at Johnston Press were up 19%.

Cost-cutting measures last year included a reduction in the level of senior management, the closure of the Limerick print press, outsourcing newspaper distribution and continued consolidation of back office functions.

All printing is now performed by a group print plant in the North, as well as external printers.

“The key risks for the business include the ability to stimulate revenues when the economy enters the recovery period and the risk from new competition and methods of delivery such as online advertising,” the accounts state.

The directors believe that the company is well placed to manage its business risks successfully despite the current “uncertain” economic outlook.

The accounts state that in 2010 the largest source of non-publishing revenue was from contract printing.

However, due to the closure of the Limerick print press in December 2010, these revenues will cease in 2011.

Directors’ remuneration was €692,000, up from €509,000 in the previous year.

The Scottish-owned group’s titles include the Limerick Leader, the Kilkenny People, the Donegal Democrat, the Leinster Leader, the Longford Leader and the Tallaght Echo.

Two years ago, Johnston Press withdrew the sale of its Irish regional newspapers after failing to receive a sufficiently high bid.

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