Johnston Press abandons sale of Irish titles

Newspaper publishers Johnston Press and Trinity Mirror reported more advertising pain today, but offered a glimmer of hope amid signs revenue declines are bottoming out.

Newspaper publishers Johnston Press and Trinity Mirror reported more advertising pain today, but offered a glimmer of hope amid signs revenue declines are bottoming out.

Johnston Press, which owns The Derry Journal and Leinster Leader, noted “greater stability over recent weeks” as advertising revenues fell 34.4% in the 19 weeks to May 9, easing from the near-36% plunge seen over the first two months.

However, it said it was in talks with its lenders after abandoning plans to sell its Irish titles – a move that has put it at risk of breaching banking agreements.

There were similar tough conditions at Daily Mirror and Sunday Mirror publisher Trinity, which saw ad revenues drop 30% over the 17 weeks to April 26.

However, the group, which also owns a raft of regional titles, said the decline narrowed slightly to 29% in March and April and forecast this to continue.

Johnston shares plummeted by more than 25% as news of its debt discussions overshadowed the more stable revenues outlook.

Investors were also moving to lock in profits after a recent rebound, which has seen Johnston shares rally since mid April thanks to mounting optimism for the sector.

Daily Mail & General Trust said last month classified ad sales were stabilising, while there have been reports of possible rule changes to allow more regional newspaper consolidation.

Despite the steadier picture, today’s updates revealed conditions remain dire for Britain’s battered newspapers as the recession hits advertising.

Johnston continues to slash costs having already axed 15% of its workforce last year, shedding 1,130 jobs.

It warned of more writedowns and said its long-awaited Irish title sale had to be shelved as bids missed the mark. Titles in the estate include the Limerick Leader and the Tipperary Star.

John Fry, chief executive of Johnston, sought to reassure over the group’s prospects.

He said: “While our market remains fragile, we have seen some stability in advertising revenue over recent weeks, our cost reduction programme is on track, and we are making good progress in the discussions with our debt providers.

“This gives us encouragement that we will be well placed to benefit from any recovery in the economy as and when it emerges.”

Trinity Mirror said circulation revenues had shown more resilience, down 4% in the reporting period, which saw it hike cover prices across the Daily Mirror, Daily Record, Sunday Mirror and Sunday Mail.

It expects advertising revenues for its national titles to fall by around 10% in May and 35% for regionals, while group circulation revenues are forecasted for a 5% decline.

Trinity’s regional newspapers, which include the Liverpool Echo, have been affected the most by the advertising slump, with revenues down 36% in the period and all categories falling, particularly property and recruitment.

It has also been cutting jobs to combat the conditions, last year announcing a reduction in headcount of 1,200, with more than 800 staff leaving the group during 2008 – around 9% of its workforce.

Trinity shares fell 4% as it also saw a reversal in recent gains.

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