Johnston Press helped by UK property-market revival

The publisher of the Scotsman and Yorkshire Post newspapers, as well as the Limerick Leader and Kilkenny People, today said advertising trends had improved on the back of a resurgent property market in the UK.

Johnston Press, which is to close its printing operations in Kilkenny and Edinburgh, said advertising revenues declined by 19.1% in the 10 weeks to October 31, an improvement on the 26.1% fall in the initial eight weeks of the second half and the 32.7% plunge seen in the first half.

Average weekly advertising revenues have also stabilised, with levels in September and October the same as they were in May and June.

A rebound in the UK property market, which has seen stronger levels of activity in recent months, is helping to offset ongoing declines in recruitment sales as unemployment continues to rise, according to Johnston.

It said: “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.”

The company’s shares rose 4% on confirmation of a steadier picture for the firm.

But its cost cutting drive is continuing apace as it looks to save £50m (55m) in this financial year.

The group’s latest efforts to slash costs will see it close two printing operations – in Kilkenny and in Edinburgh.

Johnston axed 439 jobs to take its workforce down to 5,969 in the first half, following a 15% headcount cull last year.

The advertising market slump caused Johnston to report wider half-year losses of £94.2m (€104m) in August.

Its rival Trinity Mirror, which owns a raft of regional papers alongside its national Mirror titles, will reveal whether it too has seen progress when it updates the market tomorrow.

Gareth Davies, analyst at Investec Securities, said it was “marginally positive” that Johnston’s ad sales trend had continued, although he cautioned the figures were being helped by easier comparatives against last year.