And companies in print media, such as Johnston Press, the local newspaper group, are lumbered with an extra problem – the rising price of newsprint. Media stocks have lost much of their glamour since September, when Granada Media, the television giant, warned of a slowdown in advertising revenue growth. And companies in print media, such as Johnston Press, the local newspaper group, are lumbered with an extra problem – the rising price of newsprint.
Johnston, Britain’s fourth-biggest regional publisher, yesterday joined its broadcasting counterparts by reporting a slowdown in advertising revenue growth in the second half of this year. Underlying ad sales are on track to rise 6 per cent, against the 9 per cent increase achieved in the first half.Tim Bowdler, the chief executive, said strong demand for recruitment advertising had been partially offset by flat sales of display advertising to clothing and electrical retailers. Circulation has held flat in Johnston’s weekly titles, and fallen in its evening titles, but group profits will be at the top end of expectations this year, Mr Bowdler said.However, he added that the recruitment advertising boom would not last. Moreover, Johnston sees printing costs rising by up to 15 per cent in 2001, as the pulp industry emerges from a cyclical downturn.In this more challenging environment, Johnston insists it will fare better than its rivals Indeed, the group aims to lead consolidation in the sector. It is one of the three companies bidding in the stalled auction for Regional Independent Media, publisher of the Yorkshire Post.

There could even be a tie-up with a regional broadcaster.Analysts expect pre-tax profits of £64m and earnings of 22.1p this year, rising by about 8 per cent in 2001. The shares, up 8p at 356.5p, enjoy a forward multiple of 16, a valuation that places a lot of faith in Mr Bowdler. In the present climate, the shares look fully priced.IDS Group There’s no hiding from Tech Wreck – not even in the obscurest niches of the software sector. IDS, the world’s largest supplier of software for hire purchase applications, has become the latest technology firm to to warn about its prospects.IDS’s shares tumbled 38 per cent, to 170p, yesterday after it said some contracts might not come in until 2001. The stock is now 58 per cent off its 400p high, touched at the peak of the technology share boom in February.IDS’s software is used mainly by motor dealerships for calculating depreciation on cars purchased through finance packages. Yesterday’s warning comes two months after the company bought Decision Systems, a larger US rival.

The acquisition is doing just fine, IDS said, but customers in the existing business, known as CFS before the US deal, are stalling over signing orders.Meanwhile, IDS is thought to be planning to apply strict US accounting policies to the way sales at the CFS operations are recognised. Earlier this year, some analysts said CFS booked sales too soon before obtaining payment, and gave customers too long to pay. While the healthy Decision Systems operations are now the bulk of IDS’s business, the adoption of US accounting policies could lead to hefty goodwill write-offs at the former CFS operations.Amid so much uncertainty, it’s little wonder the shares took such a pasting yesterday. Forecasting IDS’s results is now not much more than a guessing game.