The publisher of The Scotsman and The Yorkshire Post said yesterday it had reversed years of falling profits despite its revenues falling 11.4 per cent year-on-year in the 18 week period to 4 May. Although revenues continued to slide, chief executive Ashley Highfield said there was positive news on this front, with the rate of decline slowing.
The return to operating profit growth will come as a boost to Highfield – a former Microsoft and BBC executive – who was brought into the group in July 2011.
Last year, he introduced a massive cost-cutting operation that saw almost one in four staff at Johnston Press’s 250 newspapers leave, which Highfield said would save the company around £20m this year.
Operating profit fell 12 per cent in 2012 and 10 per cent the year before that. It has not seen the measure rise since 2006.
“While the economic environment continued to be challenging, the implementation of our strategy progressed further,” Highfield said. The group has relaunched many of its titles, turning some daily papers into weekly ones and ramping up its digital operations.
This strategy showed signs of working yesterday, as Johnston Press revealed that online revenues had risen 8.1 per cent.
The news did not cheer the City however, with shares down four per cent. “The simple fact is that it has taken seven years for the group’s cost base to align properly with falling revenues,” Edison’s Iain Daley said.
PROFILE: ASHLEY HIGHFIELD
ASHLEY Highfield’s appointment as Johnston Press chief executive, announced in July 2011, could only ever be interpreted as a radical move to bring the historic newspaper publisher into the digital age, given that his CV includes creating the BBC’s iPlayer and a three-year stint at Microsoft. The 47-year-old joined Johnston after stepping down from his role overseeing Microsoft’s online and advertising business in the UK, and quickly set about trimming the company’s costs and revamping its digital portfolio. He told staff that he was taking notes from the success of internet portals such as Mumsnet, and in his first full year in charge, announced plans to cut 1,300 staff – around 23 per cent of the workforce. He has recently talked about adding online TV channels to Johnston’s services, an area where he has had conflicting experiences. Hailed for the success of the BBC’s iPlayer, which he launched in 2007, he ended an eight-year stint at the broadcaster the year after when he left to launch Project Kangaroo, the ill-fated online video collaboration between the BBC, ITV and Channel 4. Highfield left after just four months however, joining Microsoft in 2008 when it became clear that Project Kangaroo would be blocked on competition grounds.
Despite Johnston’s struggles, investors have clearly warmed to Highfield, and shares have trebled since he was hired.