Johnston Press eyes digital recovery
The company, which owns nearly 250 titles including The Scotsman and Yorkshire Post, said sales fell by 14.7% in the six weeks since the start of July after London 2012 hit advertising not directly related to the event.
%VIRTUAL-SkimlinksPromo%Half-year figures revealed total ad revenues fell by 8.2% in the six months to June 30, while underlying interim pre-tax profits nearly halved to £8.1 million from £15.7 million a year earlier.
But Johnston said an overhaul to "put digital at the heart" of the business would begin delivering results in the second half and throughout 2013 as title relaunches, cover price hikes and new websites boost performance.
Chief executive Ashley Highfield hailed a period of "tremendous activity" in the first six months.
Since the revamp was unveiled in April, the group has already relaunched 23 titles as integrated digital and print products with aims to increase the group's web audience to match its newspaper circulation. Johnston also converted five daily titles to weekly publications, including the Northampton Chronicle and Echo and Northamptonshire Evening Telegraph.
This impacted newspaper sales revenues, which were down 3.1% in the first half, but digital revenues rose 8.4% in the half-year, with a "dramatic" increase in mobile audiences.
Johnston introduced iPad apps for seven of its titles and said The Scotsman app was downloaded 20,000 times in the half-year. It has also handed out iPads and new software to 1,000 of its sales staff under the overhaul and is starting to equip editorial staff with iPads, laptops and smartphones under plans for all its workforce to have the technology they need by the end of 2013.
But Johnston shares fell 6% while analysts remained concerned about the group's outlook as underlying profits continue to come under pressure. Johnston said it had reduced its workforce by another 8.5% to 4,431 in the first half of the year as part of moves to save cash, with costs slashed by £12.8 million in the half-year.
Johnathan Barrett, analyst at Singer Capital Markets, said: "While there has been some modest strategic progress in relation to relaunches and digital revenue growth the picture of an over-indebted legacy business remains largely unchanged."