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Johnston Press recorded a £300m pre tax loss in 2016 as declining print advertising revenues and a writedown in the value of its newspaper titles dealt another blow to the struggling local news group.
The publisher of the I and 200 local UK titles, including the Scotsman and the Yorkshire Evening Post, said it had recorded an impairment charge of £344m on its publishing and print assets. This included a £223.9m writedown reported last August and a further charge of £120.4m taken at the year-end.
The company said the writedowns reflected “the current trading performance of the group” which saw overall revenues decline by 8 per cent to £222m for the 12 months to the end of December 2016. Total advertising revenue fell by 17.5 per cent excluding the I.
Johnston Press said the total value of the publishing titles it owns was now £120m and that the company now has net assets which are less than “half of its called-up share capital”.
“Pursuant to section 656 of the Companies Act 2006, the directors will call a general meeting of the company within 28 days to consider whether any, and if so what, steps should be taken to deal with the situation,” the company added.
Chief executive Ashley Highfield blamed economic uncertainty created by last June’s Brexit vote for the drop in advertising revenues, particularly from small and medium sized businesses who make up the core of the group’s advertising market.
Mr Highfield said:
Despite an industry wide backdrop of significant downward pressure on revenues, the actions we have taken to pilot the business through this rapidly-changing market and create the conditions from which to create growth are starting to bear fruit: circulation figures of key titles are improving, the i has bucked the trend of declining national newspaper sales and our progressive editorial and sales models are starting to transform our regional businesses.