National World records profit in first results since JPI buy
Friday, September 10, 2021
National World has reported a profit in its first set of financial results since buying JPI Media at the start of the year.
For the six-month period ended 3 July 2021, the company recorded revenue of £42.1m and made a pre-tax profit of £3.5m.
Alongside the results, which were released yesterday (9 September), the company said that since its acquisition of JPI was completed on 2 January, “significant progress has been made 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”.
It added digital publishing revenue on a proforma basis grew by 21% year-on-year, partially mitigating the 9% fall in publishing print revenue.
Since the acquisition, the business said it has expanded its footprint into all major metropolitan centres in the UK with the launch of nine ‘World’ brand sites.
The nationalworld.com site provides coverage across the whole of the UK and is supported by the other eight World sites. The new sites are being launched by leveraging existing resource and annualised investment of £2m.
The process of delayering and flattening management structures has now been completed, and the company said this has delivered annualised cost savings of £4.3m net of National World management costs.
It remains on track to deliver at least £5m of annualised cost savings net of National World management costs, with restructuring costs of around £4m.
The business had cash of £19.1m at the end of the period, with outstanding debt of £1m and deferred consideration on the acquisition of JPI Group of £5m.
£20m of convertible secured loan notes raised for the JPI acquisition were all converted to equity on 7 May 2021.
National World chairman David Montgomery said: “I am pleased with the progress made since the acquisition of JPI Group. I pay tribute to the staff who have energetically deployed their skills and talent to transform the business. Our product launches, including nationalworld.com and eight World sites in key markets, move the company from its traditional geographical base to a UK wide footprint.
“The scene is set for further organic growth in audience based on original content not available elsewhere and further acquisitions. These will support first and foremost the increase in our digital capabilities and assist in the creation of a sustainable growth publishing model. We will also consider heritage assets at an appropriate valuation.”
National World said that during July and August 2021 revenue on a proforma basis “is broadly in line with 2020 and in line with management’s expectations”.
It added that while there remains volatility in the trading environment following the lifting of Covid restrictions, the board anticipates trading for the full year to be in line with market expectations, “despite a significant increase in newsprint prices in the second half of the year mitigated by further cost savings”.
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.