Johnston Press optimistic despite 15 per cent fall in advertising revenue

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Johnston Press today announced a significant drop in profits, but the company's CEO, Tim Bowdler, remains optimistic, he told BBC Radio 4's Today programme.

An interim management statement for the 44 weeks leading up to November 1 showed that total revenue for the publisher fell by 15.5 per cent and print advertising was down by 17.4 per cent.

While digital advertising continued to grow strongly at 36.8 per cent, albeit with recent weeks showing slower growth reflecting the performance of the wider economy.

Between the 27th and 44th weeks of the year, there were year-on-year declines across all advertising fields: property by 48.4 per cent, employment by 32.1 per cent, motor by 24.3 per cent and display by 12.1 per cent.

Despite the revenue slump Tim Bowdler, when interviewed on the Today programme said, that the company's 'cyclical downturn' was indicative of the economy as a whole.

"I think you need to stand back and look at a situation where regional newspapers are a good lead indicator - they are a barometer of what's happening in the economy," he told BBC business correspondent Nick Cosgrove.

"Clearly as we look ahead, we are entering into a recession, and these figures clearly indicate that."

But, he added, 'beneath it all Johnston Press is a very profitable, cash generative business'.

"If you look at media analysts, they're forecasting that we will make profits before tax and interest of more than £120 million so we're still a good strong business, but clearly in a difficult marketplace," he said.

Bowdler said newspaper prices would only be raised 'where we [Johnston Press] believe that is the right thing to do', adding that the publisher would 'not do things in our business which will be counter to its long-term health'.

In regards to the raging debate on the BBC's expansion of its regional websites , he said he regarded proposals 'negatively'. "We are investing heavily in our own websites and audio visual provision," he said.

"We think it is entirely wrong (...) their [the BBC's] proposal is to put public money into something where the commercial world is actively investing and fully capable of meeting the public need.

Cosgrove suggested that the BBC's lack of advertising would reduce the threat to regional media, but Bowdler said it was 'a spurious point'. "Advertising is directly linked to size of the audience and the BBC, by investing in these activities, will undoubtedly take audience," he said.

Listen to the Today Programme in full here (Bowdler is interviewed at around 2hr 45mins).