Financial results for 2012 released today show digital advertising revenues for the group grew by 12.7 per cent to £20.6 million last year, but the group experienced an overall decrease in ad revenues of 12.7 per cent.
Digital revenues grew by 8.4 per cent in the first half of last year, increasing to 14.4 per cent in the second half of the year.
Total ad revenues were down more than 15 per cent in the first 10 weeks of this year.
A release from Johnston Press, which owns more than 300 local and regional titles including The Scotsman, states that the increased digital revenues are due to growth in digital employment and local display revenues, reflecting "the significant improvement in our digital audience growth".
The results show an increase in the number or digital readers, with the statement from Johnston Press stating the group "has the UK's fastest growing and largest portfolio of regional publisher websites".
The report states that the average monthly digital audience grew by 21 per cent year-on-year in 2012 to more than 10 million unique users, "resulting in an aggregate print and digital audience growth of over 5 per cent".
The results also show that the local publishing group narrowed its losses last year.
It made losses of £7 million in 2012 compared with £144 million the previous year. It also reduced its debt from £351 million to £319 million.
Savings were made through making the group "more efficient", according to the release, with year-on-year savings of £37.6 million.
Johnston Press made significant staff cuts in 2012, reducing the total headcount by more than a fifth (23.1 per cent) to 4,350 and closed four print sites.
Debt reduction was also helped by "the cash receipt from the partial cancellation of the printing contract with News International", the report explains.
In his report Ashley Highfield, chief executive of Johnston Press, states that investments have also been made.
He said that by the end of 2012 the company had equipped all 1,500 sales staff with Salesforce.com software and 800 with iPads. He added that more than 350 journalists had been given new laptops and smartphones.
He also said 69 newspapers had been redesigned, all websites had been upgraded, and the group had launched more than 200 mobile websites, 18 tablet apps and 11 smartphone apps.
In the report Highfield, who took up the role of chief executive in November 2011, said "digital remains key to our future".
Commenting on the outlook he said: "Good progress has been made in the process of 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."
He added: "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 along with continued strong cash flow.
"The on-going development of our trusted local newspaper brands across print and digital remains key to us doing this, allied to the best use of both current and developing technology and the opportunities they can create for us."