JOHNSTON Press has said that it is confident of making a satisfactory return from its Euro138m purchase of the Leinster Leader group, though sources say advertising growth at its Irish titles was half that of most of its competitors.
This low level of growth, combined with a general sales decline in the Irish market, has led some observers to question the wisdom of the purchase.
The group revealed last week that advertising revenues at its Irish operations, which it bought in 2005, grew by 7.5% last year. However, sources have indicated that other regional publishers experienced average advertising growth of 13% last year, with some achieving increases of almost 20%.
But Johnston Press chief executive Tim Bowdler said it was delighted with the performance of its Irish titles.
"In 2006, the cash generated by the business was significantly higher than the interest on the finance used to purchase it."
He said that its poor advertising growth was a temporary issue which was due to the company ensuring that it had the right management structures in place.
"We've now put in a really strong management team, split the business into three regions and we're investing in a new advertising system, " he said.
Bowdler's comments come after the latest ABC circulation figures revealed that sales at most Irish regional titles dropped by more than 3% last year.
According to David Hickey, chief executive of the Connacht Tribune, where sales have fallen by 6%, regional newspapers ARE finding it increasingly difficult to draw in new readers, particularly those who had moved into their area from Dublin, where there was no history of local newspapers.
"There are also increasing number of free newspapers out there where no purchasing decisions are involved. There are now three freesheets in Galway city alone, " he said.
"Falling sales is a trend we're now seeing across the country and it's up to newspaper owners to address it."
The chief executive of Independent Newspapers' regional newspapers, Ger Walsh, said the figures showed that regional papers had to adapt to market changes to continue to grow.
He said that its Wexford People group, which now has weekly sales of almost 50,000, had succeeded in attracting new readers through a unique mixture of hard news and lifestyle features.
"My belief is that if you offer a local and sufficiently attractive title, you will succeed against the internet or anything else. I think that we are proving it with the People
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