Johnston says profits boosted by local advertising

LONDON - Regional newspaper publisher Johnston Press said first-half operating profit before exceptional items rose 29% to £62.1m, as local advertising continued to grow in the face of a wider advertising downturn.

Pre-tax profits rose 25% to £50.6m, up from £40.4m a year earlier. Turnover jumped by 26% from £153.9m last time to £193.6m.

The figures were also boosted by the inclusion of the results from its recent acquisition Regional Independent Media, which was completed in April and netted the publisher the Yorkshire Post, the sixth largest regional newspaper group in the UK.

The company said like-for-like advertising revenues at Johnston grew 1.2%, despite a 1.9% decline in recruitment advertising and a 0.2% fall in motors advertising. However, these falls were offset by revenue growth in all other categories.

The company said ad volumes grew strongly in the north of England and Scotland, but fell in the South as recruitment advertising dried up.

The company said advertising yields increased in all sectors apart from property, where there was a reduction in new-homes advertising.

Johnston Press had been set to acquire eight regional newspapers in the East Midlands from Trinity Mirror, until the deal was scuppered by the Competition Commission, which ruled that the deal would create a monopoly in the region.

Johnston chief executive Tim Bowdler said: "We were disappointed by the negative outcome of the protracted Competition Commission inquiry into our proposed £16m acquisition of eight free newspapers in the East Midlands from Trinity Mirror.

"We have made the Department of Trade & Industry aware of our concerns that the commission failed properly to appreciate the competitive nature of the markets in which we operate or to take full account of the considerable volume of evidence we presented."

Shares in Johnston were trading up by 2.2%, or 7.5p, at 349p this morning.

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