British newspaper group Johnston Press which owns a number of Irish papers. today said print advertising revenues for the early weeks of 2008 were down on the same period a year earlier.
The group, which publishes 18 daily newspapers and 300 weekly titles, bettered market expectations for 2007 results but told shareholders that advertising markets were likely to remain challenging in the year ahead.
Johnston bought the Leinster Leader Group for €139 million in 2005 also owns, among others, the Longford Leader, Leitrim Observer and the Dundalk Democrat and Kilkenny People.
It reported pre-tax profits of £137.4 million for 2007, a fall of 6.3 per cent on a year earlier as revenues from acquisitions, digital business and contract print sales pushed total turnover ahead by 0.9 per cent to £608 million.
While the trend for advertising improved during last year, Johnston said all categories except property declined over the 12 month period. Total print advertising revenues were 2.1 per cent lower at £401.5 million with motor adverts down by 8.2 per cent at £40.2 million but property up 5.4 per cent at £79.7 million.
Shares fell 6 per cent today as investors took note of the company's cautious outlook, with total UK advertising in the early weeks of 2008 down 4.2 per cent on a year earlier. The figure fell 1.1 per cent to £416.6 million last year.
Numis Securities said today's update put pressure on its forecast for a 1 per cent full year decline in advertising revenues. The broker is currently estimating 2008 profits of £139 million, but will now cut this to £130 million.
Johnston chairman Roger Parry said: "Although we expect continued strong growth from our digital activities, the main factor influencing 2008 is expected to be a continued general lack of confidence which suggests that advertising markets will remain challenging."
The company said new printing facilities at Dinnington near Sheffield and Portsmouth were working well and have resulted in significant improvements in operating efficiency as well as generating additional contract printing revenues, primarily from News International.
It also doubled ongoing annual expenditure on developing its digital channels to £9 million, resulting in a 34 per cent improvement in digital revenues to £15.1 million.