National World outlines progress in first trading update
Tuesday, June 1, 2021
National World has revealed the progress it has made in the five months since completing its acquisition of JPI Media, in its first trading update released today (1 June).
During the 21-week period ended 29 May 2021, the business said it has completed an initial reorganisation “with significant cost reduction”. The group is now entering the next phase of its development and aims to double its online audience by the second half of 2022.
Since the £10.2m deal was completed on 2 January, National World said it has made progress on the strategy to localise, energise, digitise, and monetise relevant and unique content to create a modern operating model for news publishing across multiple brands and platforms.
The company said it has delayered and flattened management structures to deliver annualised saving of £4m net of National World management costs. It remains on track to deliver at least £5m of annualised savings during 2021 with restructuring costs of around £4m.
The group added it has also maintained strong cash management, with cash balances of £18m at the end of the period, ahead of expectations.
It has also streamlined its head office function and created seven regional media units covering commercially homogeneous markets, with the redeployment of “several hundred” staff.
National World estimated year-on-year revenue trends for the 21-week period on a like-for-like basis assuming the business had been acquired at the beginning of 2020.
Revenue for the first quarter fell by 18% year-on-year, with an increase of 18% for April and May compared with the same months in 2020, when the UK was in a national lockdown due to the coronavirus pandemic.
Print advertising and circulation revenue is estimated to have fallen by 10% during the period, with April and May achieving advertising revenue growth of 34%, and circulation revenue in line with 2020.
Digital advertising revenue is estimated to have grown by 1% during the period, with growth of 45% across April and May.
Digital subscription revenue grew by over 200% as subscriptions were rolled out across all the daily newspaper websites during the course of 2020. Additionally, in the last month 21 weekly papers have introduced digital subscriptions.
Other digital revenue grew by 26% and includes the benefit of content provision revenues from Google and Facebook, which have generated revenue of around £100,000 per month from February 2021.
The group said it has also invested in technology and strengthened its legacy systems during the period. Its digital audience has stabilised during the course of May and returned to growth with estimated page views of 110 million for the month. Further growth is expected throughout the year, with incremental growth driven by further online launches.
The board is confident that the company’s performance for 2021 will be in line with its expectations.
National World chairman David Montgomery said: “The many talented staff of JPI Media have assisted in a fast transformation of the business based on localisation with a focus on relevant content and supporting the communities served as they recover from lockdown.
“This transition and further investment in technology and partnerships have prepared National World for the next stage of rapid organic growth. Our target to double our online audience by the second half of next year is underpinned by providing quality content consistent with our existing premium brands across both a local and national footprint.
“We continue to evaluate investment and acquisition opportunities that would enhance our digital capabilities.”
National World was established by one-time Mirror Group chief executive Montgomery as a takeover vehicle in 2019. Through the JPI takeover its brands and websites include The Scotsman, The Yorkshire Post, Sheffield Star, Edinburgh Evening News, Portsmouth News and Lancashire Evening Post.