Johnston sees election subduing ad sales until Q3

The group, which runs 18 daily and 300 weekly newspapers, including the Yorkshire Post, and more than 300 local websites, reported a 7.1 per cent decline in like-for-like advertising revenues in the 18 weeks to May 8, after a 7.3 per cent decline in the first nine weeks of the year.

"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.

British newspapers including peer Trinity Mirror had been reporting improving rates of decline in regional advertising, which has been 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. It said it expected to make total savings this year of at least 15m, up from its previous target of 10m.

Johnston shares have risen 36 per cent this year so far, outperforming a three per cent rise in the European media index .SXMP. They now trade at 7.2 times expected 2010 earnings, still below the UK publishing sector average of 11.4.