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Date: Wednesday 27 Aug 2008

LONDON (ShareCast) - Regional newspaper group Johnston Group axed its interim dividend as first half ad revenues plunged by 9.5% with little improvement expected over the remainder of the year.

Johnston, which launched a rescue £212m rights issue at 53p in May, saw underlying profits slump by 18% to £62.5m, on sales of £293m, down from £313m. After impairment charges and other one-off costs, totaling £116m, Johnston posted a loss of £53.7m.

"Advertising trends have continued to deteriorate over the course of the year and future performance will inevitably be linked to the economies of the UK and to a lesser extent that of the Republic of Ireland," chief executive Tim Bowdler said.

The proceeds of the fund raising cut borrowings, with net debt at 30 June 2008 falling by £249.2m to £483.9m.

A decision on the final dividend will be made assessing second half trading, Johnston said.





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