National World readies £5m listing

By Jo Francis, Wednesday 18 September 2019

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David Montgomery’s new National World ‘buy and build’ news publishing business is poised to join the London Stock Exchange through the listing of £5m-worth of shares.

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National World: same strategy as Local World but on a larger scale

National World executive chairman Montgomery is a former chief executive of the then-Mirror Group, and he has also enlisted ex-Trinity Mirror (now Reach) group finance director Vijay Vaghela to join the National World team as chief operating officer. Among the rumoured targets for the new venture are news brands that currently belong to JPI Media.

A prospectus for the listing of National World was published this week, with the business expected to join the LSE tomorrow (19 September).

The listing will involve the placing of 50m new ordinary 10p shares, resulting in expected net proceeds after expenses of £4.6m. The shares will not be for sale to the general public. They will be offered exclusively to ‘qualified investors and relevant persons’ by placing agent and financial adviser Dowgate.

The company said it planned to bring “a new operating model” to news publishing, and claimed that many traditional publishers had failed to implement effective ways of managing, “and more importantly” monetising, digital distribution channels and platforms.

“National World will jettison legacy systems and archaic industrial practices to create efficient dissemination of news, monetising it by matching content to audience,” Montgomery said.

As well as acquisition targets, the firm is also looking at potential commercial partnerships.

“Few [traditional] publishers have invested adequately in innovation preferring to support profits through cost cutting or consolidation to mitigate lost revenue,” the prospectus stated.

“National World intends to assemble a group of news publishing assets and acquire or license the technology to address: online applications, content and multi-platform sales management. Where possible, cash generated from the reduction of duplicated costs will be invested to grow the online audience to a greatly increased scale,” it said.

“National World will also seek to recruit an industrial partner to assist with the deployment of the platform and the development of a subscription model. Given the shrinking of the news publishing market in comparison to social media the financial and commercial case for combining online and offline services to support multiple news publishing brands should offer the potential of attractive returns.”

Montgomery also founded acquisition vehicle Local World, which acquired titles from Northcliffe Media and Iliffe News & Media before being sold to Reach four years ago.

“The Company intends to repeat the commercial strategy used by Local World but on a larger scale and to a wider range of media assets. It will seek to acquire both historic and more recently established news brands together with the technology to change the business model for print and digital news publishing with the dual objective of combining continued cost reduction with sustained online revenue growth.”

National World also said that the listed structure would give the business “efficient access to investment capital, backed by a committed founding shareholder base willing to support significant acquisitions”.

While JPI Media has already been named as a potential target, National World will have competition with up to eight potential buyers – including Reach – rumoured to be interested in JPIMedia’s assets, which include the i newspaper, the Yorkshire Post and the Scotsman.

National World’s executive directors will be paid £5,000 a year and its non-execs will receive £3,000 per annum until such a time as the business completes an acquisition.

The firm said that its leadership team boasts nearly 90 years of relevant sector experience. Alongside Montgomery and Vaghela it has three non-executive directors: former Mirror Group and Trinity Mirror executive Mark Hollinshead; data insight expert John Rowe, who is chief executive of the Clickso Group; and Steve Barber, who has a track record in non-executive roles at major businesses including Next, the AA and Domino’s Pizza Group. He was previously a senior partner at Pricewaterhouse where he headed up its Entertainment, Media & Communions business, and was also chief financial officer at Mirror Group.

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