British newspaper group Johnston Press said Britain's election had subdued ad spending in April and it expected no significant improvement until the third quarter, sending its shares down 6.6 per cent today.
The group, whose regional titles include the Scotsman and the Yorkshire Post, reported a 7.1 per cent decline in like-for-like advertising revenue in the 18 weeks to May 8th, after a 7.3 per cent decline in the first nine weeks.
"We would expect the election's impact to continue through the second quarter and therefore not see any significant improvements in the current trend until Q3 2010," Johnston said in a statement today.
"We had been forecasting flat 2010 advertising ... but believe it is prudent to trim this to about minus 2 per cent," analysts at brokerage Numis said in a note.
"However, the group will deliver £15 million in cost savings in 2010, compared with previous guidance of 10 million, which offsets the revenue shortfall."
British newspaper publishers including Trinity Mirror had been reporting slowing rates of decline in regional advertising hit by spending cuts linked to unemployment, lower demand for cars and a weak housing market.
Johnston said it should still meet current market expectations for 2010 thanks to cost management.
Finance director Stuart Paterson told Reuters the company had no plans to close more of its hundreds of titles but said there would be further reductions in headcount.
Analysts expected Johnston to make 2010 earnings per share of 4.33 pence and revenue of 417 million pounds, according to Thomson Reuters I/B/E/S StarMine SmartEstimates, which weights analysts' estimates according to past accuracy.
Johnston shares have risen 36 percent this year so far, outperforming a 3 per cent rise in the European media index. They now trade at 7.2 times expected 2010 earnings, still below the British publishing sector average of 11.4.
Reuters