Shares in newspaper publisher Johnston Press shot up this morning after the company reported a pre-tax profits rise of more than 20 per cent.
In the 52 weeks to 2 January 2016, Johnston Press reported a 6.8 per cent year-on-year fall in revenue, from £260m to £242.3m.
But the company also cut its operating costs from £205.3m in 2014 to £191.7m.
And while its operating profit was reduced from £54.7m to £50.6m, Johnston Press reported a pre-tax profits of £31.5m, up from £25.7m.
During the year, digital revenue was up 12.4 per cent to £30.6m. This now represents 20.6 per cent of total revenue, up from 16.9 per cent in 2014. Print publishing revenue, meanwhile, was down 9.7 per cent to £193.9m.
Why it's interesting
The results come shortly before Johnston Press is due to complete its £22m acquisition of the i newspaper, which prompted the closure of The Independent.
The company's chief executive, Ashley Highfield, talked up what the “incredibly exciting” purchase meant for the company's reach.
He said: “It gives us scale, with a combined JP plus i daily print circulation of over 600,000 papers making us the UK's fourth largest news publisher, and thus numerous revenue and cost synergy opportunities.”
Highfield said that as well as contributing to earnings, the acquisition will increase digital growth and help stabilise circulation revenues.
At 8.20am, shares in Johnston Press leapt nearly 17 per cent to 47.82p.
What the company said
The challenging trading conditions experienced in the second half of 2015 have continued into Q1 2016. We have reduced costs to maintain profitability, reset our portfolio and refocused on priority markets with attractive audiences that offer the best opportunity for growth. Success in driving our national display advertising business in 2015 and the rollout of our local display advertising Sales Force initiative gives me confidence for the future despite the fact that the market remains difficult.