Advertising revenues fell 13% last year and are down more than 15% in the first 10 weeks of 2013
Publisher Johnston Press has reported a near 13% overall drop in advertising revenue for the 2012 financial year and further 15.6 per cent fall in revenue in the first 10 weeks of 2013.
The publisher of the Scotsman and Scotland on Sunday - which has a stable of around 250 newspapers – reported a pre-tax loss of £6.8 million for the 2012 financial year.
That compared with a 2011 loss of £143.8 million after revaluing its titles from £907 million down to £728 million.
The publisher said it cut more than 1,300 jobs across the group last year and reduced costs by £37.6 million.
Print advertising revenue dropped nearly 15 per cent on 2011 to £181.3 million, and cover price rises pushed overall newspaper sales down four per cent.
Johnston Press said advertising revenues had continued to fall in the first 10 weeks of the new financial year, down 15.6 per cent on a year ago when advertising was down 10.6 per cent in the first 15 weeks of the year.
The group said all advertising categories, with the exception of motoring, are now showing an “improving trend”.
Johnston Press recently moved the The Scotsman and Scotland on Sunday off the ABC national newspapers monthly circulation to the six-monthly regional press listing.
In the last monthly ABC circulation figures reported for January, The Scotsman's circulation dropped 17.5 per cent on the previous year to 32,435 copies, with 21,806 of those sold at the full cover price.
Sister paper Scotland on Sunday reported a 24 per cent drop in circulation in January compared with last year to 38,493.
National Readership Survey results for 2012 show the Scotsman's readership fell eight per cent between January and December 2012 to 137,000 while the Scotland and Sunday was down 7.6 per cent to 146,000.
Johnston Press said digital revenues rose by 12 per cent last year to £20.6 million, but added this was “not sufficient” to prevent a £45.2 million overall decline in revenue.
Johnston Press said 2012 operating profits came to £57 million, a near 12 per cent decline on the previous year.
The group benefited from a £30 million one-off payment linked to the partial cancellation of a print contract with News International last year which it used to reduce its bank borrowing by £32.3 million to £319.4 million.
Last year Johnston Press was forced to delay publication of its results by three weeks to agree new loan terms with its lenders at a cost of £11.2 million.
The group also paid £17.2 million in interest on its outstanding debt last year (2011: £25.6 million).
Pension liabilities also increased by £17.3 million last year to now stand at £121 million.
Johnston Press said the cost of closing print sites and other restructuring costs came to £16.6 million last year.
Paul Richards, a media analyst with Neumis Securities, said Johnston Press' headline operation performance was “below expectations” .
He said: Net debt of £319 million and a pension deficit of £121 million remain high relative to the £57 million of operating profit reported for the year.”
Neumis has cut its 2013 earnings after tax and costs estimate for Johnston Press from £60 million to £56 million.
Johnston Press chief executive Ashley Highfield said: “Good progress has been made in transforming the group in 2012 and the changes made provide a strong platform for us to build on in 2013 as we invest in refreshing our print portfolio, and simultaneously move our operation to be real-time, digitally led, social, mobile and ever more local.
“The economic environment remains challenging, but with the steps that we have taken to improve the effectiveness of the business, to accelerate the growth of our digital revenues and to continue to manage our costs tightly, we believe that we are well positioned to deliver a strong operating performance in 2013 with continued strong cash flow.”
Shares in Johnston Press were down nearly six per cent at the close of trading on Tuesday to 12.5 pence, leaving the group valued at £80.32 million.