Johnston Press : Interim results for 26 weeks to 30 June 2018

Johnston Press plc and its subsidiaries ('the Group'), (LSE: JPR), announces its results for the 26 week period ended 30 June 2018.

Operational Highlights¹

• A strong performance from the i newspaper, which saw a 61.0% increase in adjusted EBITDA on H1 2017 to £6.0m², has helped to mitigate a broader decline in revenues.
• The Group has posted a statutory operating profit of £7.4m compared to £4.9m in the same period last year while delivering an adjusted EBITDA of £19m at a margin of 20.4%.
• Consistent with pressures seen across the industry, adjusted advertising revenues from continuing operations have fallen by 15.0% with revenue from classified advertising showing a decline of 28.5% compared to the same period last year.
• Digital audiences grew to a record 27.3m average unique users per month. However, the effects of algorithm and news feed changes by Google and Facebook contributed to total digital advertising revenues declining by 7.4% (down 4.3% excluding classifieds) on H1 2017 to £12.2m.
• Adjusted newspaper sales circulation revenues have proven resilient, falling by 1.7% on H1 2017 to £38.9m, with price rises broadly off-setting the impact of circulation declines.
• The Group's adjusted net debt position³, which excludes mark-to-market gains on our Bonds, is £203.2m - with interest payments consuming £9.5m of cash in the period.

Financial Highlights

Statutory results for the Group:

• Total revenue was £93.0m (H1 2017: £103.3m) down 10.0%
• Operating profit was £7.4m (H1 2017: £4.9m) up 50.1%
• Profit before tax was £6.2m (H1 2017: loss before tax of £10.2m) includes a non-cash impairment of £3.5m (H1 2017: £4.5m) and mark-to-market gain on the Bond of £8.8m (H1 2017: loss of £4.4m)

Adjusted¹ results for the Group:

• Total adjusted revenue was £93.0m (H1 2017: £101.3m) down 8.2%, (down 4.1% excluding classifieds)
• Adjusted operating profit was £16.6m (H1 2017: £16.2m) up 2.4%
• Adjusted Group EBITDA was £19.0m (H1 2017: £19.7m) down 3.7%
• Adjusted EBITDA margin of 20.4% (H1 2017: 19.5%)
• Adjusted net debt³ was £203.2m at 30 June 2018 (as at 30 December 2017: £195.9m)

Strategic Review

• The Strategic Review is ongoing, and we will provide an update as soon as possible.

Commenting on the results, Chief Executive Officer David King said:

'There are two sets of issues affecting Johnston Press. The first is the Group's historical debts, including its pension obligations, which continue to weigh on our Balance Sheet. The second is the tough market conditions affecting the performance of our newspapers and websites. However, our resilient performance allowed us to generate an operating profit of £7.4m in the period, up from £4.9m in H1 2017.

'The strong performance of the i demonstrates that it is possible to grow a newspaper brand, despite the prevailing headwinds. The i grew its circulation revenues by 17% and its advertising revenues by 20% compared to H1 2017. The digital audience for inews.com grew to 4.2m in June, up from 1.3m in December last year.

'The market backdrop for regional/local newspapers is extremely difficult, as evidenced by the 15% drop in our adjusted advertising revenues from H1 2017. We have continued to make progress growing digital audiences to a record 27.3m average unique users per month. However, the continued challenges posed by Google and Facebook, seen most recently through algorithm and news feed changes, has contributed to total digital revenue decline, while Balance Sheet constraints has restricted the Group's ability to invest, and counter these effects. We will engage with the Cairncross Review into the future of high quality journalism with a view to helping address the challenges faced by local news organisations in monetising its content.

'As part of the Strategic Review, the Group continues to explore its options for the refinancing or restructuring of the Group's debt but, as yet, no decisions have been made nor agreements reached. We will provide an update as soon as possible.'

Financial Highlights (continued)

£'m	Continuing Operations - Statutory			Continuing Operations - Adjusted1
26 weeks ended:	30 June 2018	1 July 2017	% change4	30 June 2018	Re-stated6 1 July 2017	% change4
Total revenue (combined print and digital) - Group5	93.0	103.3	(10.0%)	93.0	101.3	(8.2%)
Total advertising revenue (combined print and digital) - Group	43.2	52.7	(17.8%)	43.2	50.8	(15.0%)
Total advertising revenue (combined print and digital) - the i	17.2	14.5	18.3%	17.2	14.5	18.3%
Print advertising (ex classifieds)	21.4	25.3	(15.4%)	21.4	23.8	(10.0%)
Digital advertising,(ex classifieds)	9.7	10.0	(3.1%)	9.7	10.1	(4.3%)
Circulation revenue	38.9	39.6	(1.9%)	38.9	39.6	(1.7%)
Contract Print revenue	6.6	6.9	(3.2%)	6.6	6.9	(3.2%)
Operating profit	7.4	4.9	50.1%	16.6	16.2	2.4%
EBITDA - Group incl the i				19.0	19.7	(3.7%)
EBITDA - the i2				6.0	3.7	61.0%
EBITDA margin - Group incl the i				20.4%	19.5%	n/a
Profit/(loss) before tax	6.2	(10.2)	-	7.1	6.7	5.7%
Basic earnings/(loss) per share	3.6	(5.4)	-	3.9	5.1	(23.1%)
Net Debt3				203.2	191.7	(6.0%)

1. The results are presented on a continuing adjusted basis which exclude the following items: mark-to-market movement on the Bonds, impairment of intangible and tangible assets, restructuring costs, strategic review costs, items related to the defined benefit pension plan, share based payment costs, trading and write downs relating to the closure and disposal of titles and digital operations, one-off legal and acquisition costs and disposal gains.
2. No corporate costs have been allocated to the i for the purposes of the results presentation.
3. Net debt is a non-statutory term presented to show the Group's borrowings net of cash equivalents and Bonds fair value movements and includes finance leases. Adjusted net debt is stated excluding fair value mark-to-market valuation adjustments on the Bonds.
4. The % change variance has been calculated based on unrounded numbers.
5. Adjusted Classified advertising (print and digital) and other advertising revenue for the period is £12.1m (H1 2017: £16.9m), a decline of 28.5% and represented 13.0% of total adjusted revenue in H1 2018 (H1 2017: 16.7%).
6. Prior period comparative revenue has been restated to adjust out amounts relating to the Yorkshire Metro closed during 2018. This ensures that adjusted results for H1 2018 and both prior periods are presented on a consistent basis, including only the operations of the Group that are continuing from 30 June 2018.

Statutory and adjusted basis

The statutory results are for the Group and include closed titles and businesses, exceptional items, asset impairment and mark-to-market movements on the Group's Bonds. The adjusted measures represent trading results before adjusting items which are defined in the Alternative Performance Measures section. The Directors present this supplemental financial information to provide a consistent view on the underlying trading of the Group.

The adjusted figures are not a financial measure defined or specified in the applicable financial reporting framework, and therefore may not be comparable to similar measures presented by other entities. When reviewing and selecting these adjusting items, the Directors considered the guidelines issued by the European Securities and Markets Authority ('ESMA'). A reconciliation of the statutory to adjusted figures is provided within the Financial Review and within the Adjusted Performance Measures section.

Forward-looking statements

The report contains forward looking statements. Although the Group believes that the expectation reflected in these forward- looking statements are reasonable, it can give no assurance that the expectations will prove to have been correct. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward looking information, actual results may differ materially from those expressed or implied by these forward looking statements. The Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Market abuse regulation

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

For more information, contact:

Johnston Press plc
David King, CEO
020 7612 2600

Panmure Gordon
Dominic Morley
Charles Leigh-Pemberton
020 7886 2500

Liberum
Neil Patel
020 3100 2000

Edelman
Alex Simmons
Ben Fenton
020 3047 2000

Johnston Press will host a conference call for institutional investors and analysts this morning at 9.30am (GMT). The presentation will be available through our partner Arkadin (https://event.on24.com/wcc/r/1823919-1/9D2D293F62993577FD1EFD5473E98289).

To dial in to the conference call, participants should dial:

United Kingdom Toll-Free:		No: 08003589473 PIN: 87374769#
United Kingdom Toll:		No: [phone] PIN: 87374769#

Johnston Press Legal Entity Identifier: 213800JFIBCR4LGUA242

About Johnston Press

Johnston Press is a leading multimedia business with a vibrant mix of news brands that reach national, regional and local audiences. We provide news and information services to local and regional communities through our extensive portfolio of hundreds of publications and websites.

Sharing information and opinion remains at the heart of what we do and our titles, which include iconic publications such as the i newspaper, The Scotsman, The Yorkshire Post and News Letter in Northern Ireland are read via traditional print, online platforms and mobile devices by an average of 39.51 million people every month.

We are experts in combining national reach with local targeting and are better equipped than ever to help advertisers tell their stories, too, through our trusted platforms.

¹ Total average audience consists of 27.3m unique users (H1 2017: 26.5m) and print audience of 12.2m (H1 2017: 13.7m).