Embattled Johnston Press refinances

Johnston Press released its delayed full year results and they were not worth waiting for, as a slump in advertising revenues led to a collapse in profits.

The owner of The Scotsman and Yorkshire Post newspapers had put back the release of its results because it had been busy negotiating with its lenders over an extension of its credit facilities.

The company announced with its results a new three year £393.0m secured facility, which amends and extends the current facility agreement with a revised expiry date of September 30th 2015.

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The company posted an pre-tax loss of £143.8m for 2011 (2010: profit £16.5m) on revenues of £373.8m (2010: £398.1m), after taking a £163.7m charge in respect of the reduced value of intangible assets, which it said mainly reflected a change in the discount rate used within the impairment calculation rather than a change in the underlying performance of the assets.

Before non-recurring items pre-tax profit fell from £30.5m to £28.4m. Underlying earnings per share - which exclude the effects of the write-down - slipped to 3.50p from 3.67p in 2010.

Total advertising revenues decreased by 9% year-on-year with employment revenues continuing to contribute most to the decline. The rate of decline slowed from 10.1% in the first half to 7.7% in the second half.

Revenue from newspaper sales was down 1.1% compared with 2010.

In a statement the company said: "We are mitigating the shortfall in advertising revenues through tight operational control and cost management across the group. In addition, the group is continuing to develop its other revenue streams."

Chief Executive Ashley Highfield added: "Although the prospects for the economy remain downbeat in the short term, I believe we can return Johnston Press to being a growth business through the twin track approach of re-launching and revitalising our papers while simultaneously growing our websites, and taking full advantage of the opportunities created by technology and the changing media demands of our users to deliver innovative propositions."

No dividend has been proposed for the year and excess cash will continue to be used to reduce the group's indebtedness.

Net debt at the year end was £351.7m (excluding any reduction from unamortised financing fees), representing a reduction of £35.0m over the course of the year.

The group remained strongly cash generative throughout the year, with net cash in from operating activities of £67.9 m. This cash was primarily used for cash interest payments of £25.6m and to repay borrowings.

NR