Johnston hit by fall in recruitment advertising

British-based regional newspapers group Johnston Press today said advertising revenues were running 7% lower after demand for job ads slumped.

The owner of titles including the Yorkshire Post and the Lancashire Evening Post said revenues from recruitment advertising was 23% lower than a year earlier in the five months to the end of November.

It added that the market showed no immediate sign of easing, although Johnston said results for 2005 would still show “a year of progress”.

This year, Johnston became the biggest regional newspaper group in Ireland, with the acquisitions of the Leinster Leader group, Northern Ireland's Local Press company and The Kilkenny People.

In 2004, Edinburgh-based Johnston saw advertising revenues increase nearly 6%, while pre-tax profits leapt 18% to £150.6m (€223.6m).

Today, the company said employment advertising was the worst hit in the second half of this year, and without the 29% increase in revenues from Johnston’s internet sites it would have fallen by 25%.

Motor and retail ads also declined, although property ads increased because sellers had to “work harder” in the slowing housing market.

In a statement today, Johnston said: “Looking forward, the board does not anticipate any early marked improvement in advertising revenue streams.”

Shares in Johnston fell 4% today as Seymour Pierce analyst Charles Peacock said the fall in job ads was “particularly severe”.

It came just two weeks after Daily Mail & General Trust said advertising revenues at its regional newspaper arm Northcliffe were also down.

But today, Johnston said revenues from sales of its newspapers had grown as increases in cover prices offset “a modest overall decline” in circulation.

Johnston forecast that 2006 would be “another satisfactory year for the group”.

The company also said it would monitor developments at Daily Mail & General Trust, which last month said it was willing to sell Northcliffe.

Johnston today refused to say whether it was considering an approach for Northcliffe, which owns a string of papers including the Aberdeen Press and Journal, Western Daily Press and Western Morning News.

Johnston said: “Whilst we will take an interest in developments, this will only be done in the context of creating value for our shareholders and in the belief that this is unlikely to be the last significant structural change in our industry.”