News International paid Johnston Press £30m to revoke its 15-year agreement to print a number of its titles at Johnston Press’ Dinnington plant in July last year, only five years into the contract.

Johnston Press’ accounts reveal that contract printing income has dropped from £29m in 2011 to £20.3m, and contributed £3.9m to the £7.6m reduction in operating profit in 2012, bringing it down to £57m.

In September 2012, Johnston Press announced it was to shut down its Sunderland print site – the fourth in the year, following the closure of its Isle of Man, Leeds and Peterborough plants – and transfer production to the Dinnington site after the contract cancellation left the plant with spare capacity.

The closures, which left Johnston Press with three print sites, helped to reduce operating costs by £37.6m, while the £30m settlement helped shrink net debt from £351.1m to £319.4m, along with a vigorous senior management shake-up, which stripped its 25 managing directors down to just eight.

The radical personnel cuts throughout the year cost the company £24.4m in redundancy payouts and reduced headcount by 23%, from more than 5,650 in 2011 to 4,350 at December 2012.

Johnston Press chief executive Ashley Highfield, who took up his position at the end of 2011, stood by the major changes implemented at the company, and said that due to continuing tough trading conditions, there should be "no let-up in our work to reposition Johnston Press for the modern media environment" in the coming year.

He began the year by announcing that the entirety of Johnston Press’ titles would be relaunched, with five of the dailies moving to a weekly format and three formerly free newspapers gaining cover prices.

The publisher has already seen the benefits of this strategy, as the 69 relaunched titles’ circulation revenues were up 8% year-on-year and had double the subscription rates of the non-relaunched titles. Highfield said that the transformation of all 227 titles was expected within the first half of 2013.

Print advertising revenues were down 14.8% compared to December 2012 in contrast to digital advertising’s 12% income growth. However, print advertising continued to be the biggest money maker for Johnston Press, accounting for £181.3m of the total £328.7m income for the year, while digital only brought in £20.6m.

Johnston Press chairman Ian Russell said: "The steps forward that we have made in strategic development this year helped to push our share price to higher levels in the autumn than we had seen for some time, although there is much to do to return it to satisfactory levels. We continue to use excess cash to reduce the group’s debt and, as required under our financing arrangements, no dividend is proposed for the year."

He also announced that Danny Cammiade, who has served as the company’s chief operating officer since 2005, will be stepping down at the end of March. His replacement will be chosen during a re-election of the board at the AGM on 26 April.