Johnston Press reports higher profits, union asks why its members are facing job cuts
Print advertising revenue falls 11.9 percent, but cost cutting results in higher profits at the UK newspaper company
The UK newspaper publisher Johnston Press today released its year-end earnings today, reporting that profit before tax came in at £31.5 million, up 22.6 percent, while net debt down declined by £14.8 million. The better results, the company said, was the result of trimming costs in the face of declining ad revenue.
“The challenging trading conditions experienced in the second half of 2015 have continued into Q1 2016,” Ashley Highfield, Chief Executive at Johnston Press, said. “We have reduced costs to maintain profitability, reset our portfolio and refocused on priority markets with attractive audiences that offer the best opportunity for growth. Success in driving our national display advertising business in 2015 and the rollout of our local display advertising Sales Force initiative gives me confidence for the future despite the fact that the market remains difficult.”
Total revenue declined 6.8 percent, though digital advertising was up 12.4 percent to £30.6 million for the reporting period, and now represents 20.6 percent of total advertising revenues. Print publishing revenue, the combination of advertising and circulation, was down 9.7 percent.
The National Union of Journalists reacted to the news by questioning the company’s strategy of building profits at the expense of their member’s jobs.
“Members at Johnston Press are deeply skeptical about the company’s strategy. For too long they have been asked to bear the pain today for the benefit of future success which doesn’t arrive,” Laura Davison, NUJ national organiser, said.
“Members were shocked when the purchase of the i was announced; money they didn’t know the company had was diverted to a major acquisition, rather than invested internally. Branding certain titles as ‘sub core’ and announcing a focus on ‘higher yield advertisers, flourishing families, and growth towns’ feels like the company is busy writing off big sections of its workforce and its readership.”
“Now we learn that profit margins of over 20 per cent are being sustained by further cuts at grassroots level. All this means that Johnston Press is failing to take staff with them in their grand project. Action is needed to address the very real concerns members are highlighting,” Davison said.