(Reuters) - Britain’s Johnston Press suffered a 10 percent drop in first-half revenue as changes to Google and Facebook’s platforms hurt online advertising sales, sending the newspaper publisher’s shares down by almost 12 percent.
Though the company swung to a pretax profit, thanks largely to higher sales at “i” - the cut-price sister title of The Independent newspaper that went digital-only in 2016 - it is still grappling with a 220 million pound debt burden and sector-wide difficulties in boosting online revenue.
“There are two sets of issues,” Chief Executive David King said.
“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.”
The newspaper industry has struggled in recent years as advertisers migrated to online platforms, prompting cost-cutting measures from Daily Mirror publisher Reach and Daily Mail and General Trust among others.
Online revenue has been a source of hope. Reach, formerly Trinity Mirror, reported a 6 percent rise in like-for-like digital sales at its publishing division in the six months to July 1.
The Daily Mail, however, showed an 8 percent decline in online advertising revenue for the half-year to March 31 despite MailOnline being the most visited UK-based news website.
The fallout from changes in privacy law have affected news sites, with changes to Google’s online search algorithm and Facebook’s news feed lowering Johnston’s digital advertising revenue by 7.4 percent, the results showed.
The struggle with declining revenue at Johnston, which owns more than 200 UK regional newspapers including the Scotsman and the Yorkshire Post, earlier prompted biggest shareholder Custos Group to push for a management shake-up at the publisher.
Johnston’s overall revenue slid to 93 million pounds ($118.6 million) in the six months to June 30, down from 103.3 million pounds in the same period last year.
Pretax profit was 6.2 million pounds, compared with a loss of 10.2 million pounds a year earlier, led largely by the stronger performance at “i”.
Shares in the company were down 11.8 percent at 1004 GMT.
Reporting by Justin George Varghese and Shashwat Awasthi in Bengaluru; Editing by Sai Sachin Ravikumar and David Goodman