Johnston Press chief to step down as public sector cuts take their toll

Johnston Press has announced that John Fry, its chief executive, will leave the company in March 2012, as the company's interim results highlight the impact of cuts in public sector advertising.

The Lancashire Evening Post: Johnston Press title
The Lancashire Evening Post: Johnston Press title

Fry is leaving the regional publishing business to pursue a number of business opportunities and to spend time with his family.

A spokeswoman for Johnston Press said his departure had no relation to today's results.

The group reported a £16.5m pre-tax profit for the year, up £130.3m on the loss of £113.8m posted in 2009.

The main driver behind this increase has been the significantly lower net impairment of intangible assets reported in 2010 – £112.9m lower than the net impairment charge reported in 2009.

However, an improvement in ad revenue in the second half of the year did not materialise as the publisher of the Scotsman and The Yorkshire Post had hoped.

UK ad revenue was £243.1m in the 52 weeks ended 1 January 2011, down 5.7% year on year from £257.9m in 2009. Ad revenue was down 5.2% in the first half of June and down 6.2% in the second half to December.

Its advertising loses deepened for the first nine weeks of this year, resulting in an 11.4% drop year on year.

Johnston Press said the main reason for the continued decline in the second half of the year has been due to cut-backs in public sector expenditure, and said the effects of the Government's spending review have been most notable in the employment sector.

In addition to significant reduction in public sector recruitment advertising, Johnston Press said there was a reduction in the volume of public notices, grouped by Johnston Press as part of "other classified".

Other notable trends highlighted by the publisher included a slowing of the rate of growth seen in the property sector in the first half, reflecting the volume of property sales, and an improvement in motors and display, reflecting the UK's GDP growth.

Johnston Press had underlying profit of £30.5m, before tax, during the year – down 29.6% from £43.3m in 2009. Underlying profit excludes non-recurring items and IAS 21/39 items, which relate to the measurement of financial assets and liabilities and currency exchange.

Underlying revenue at the group was £389.1m during 2010, down 6% from £423.7m in 2009, while statutory revenues were £398.1m, down 7% from £428.0m in 2009.

Johnston Press said print advertising continued to decline in 2010, down 7.1%. Digital advertising fared better, up 4% on a like-for-like basis.

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