Advertising drop hits regional newspaper group

Regional newspaper publisher Johnston Press reported an 8% fall in advertising revenues today and warned that it did not expect any improvement in the near future.

The group, which owns more than 300 titles including The Scotsman and the Yorkshire Post in the UK and 11 newspaper titles in Ireland including the Limerick Leader, suffered from a sharp fall in job and motor advertising. Advertising spend by retailers was also down.

Johnston said property advertising revenues were up, but warned that overall “the board does not see any early indication of improvements in advertising markets”.

Panmure Gordon analyst Alex DeGroote said that with advertising accounting for around 80% of Johnston’s revenues, “the outlook is poor”.

Shares in the company fell 6% today.

The newspaper industry has suffered as lucrative advertising spend shifted from print to the internet in recent years.

Johnston said print advertising revenues fell 8% between July and November, although the decline was reduced to 7.4% when digital revenues were included.

Employment advertising fell 12.2% in the five months to the end of November and 24.2% in the first half of the year.

Johnston said motor advertising was “continuing to experience double-digit declines” while the retail sector “continues to be challenging”.

The company added: “The one category still experiencing growth is property advertising, albeit at a slower rate as comparatives get tougher.”

Despite the fall in advertising revenues, Johnston said sales revenues were up thanks to increased cover prices which offset declines in circulation.

It also said the integration of The Scotsman “continues to progress well” following the £160m (€237m) acquisition in December last year.