Trading Update for the 21 weeks to 29 May 2021

RNS Number : 2888A

National World PLC

01 June 2021

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "EUWA")) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 National World plc

Trading Update for 21 week period ended 29 May 2021

National World plc ('the Group') is pleased to announce its first trading update for the 21 week period ended 29 May 2021 ('the period').

Initial reorganisation completed with significant cost reduction. The Group enters the next phase of its development and targets doubling its online audience by the second half of 2022

Post the acquisition of JPI Media 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. Key highlights of the transformation initiatives include:

• Delayering and flattening management structures delivering annualised savings of £4.0 million net of National World management costs. The Group remains on track to deliver at least £5.0 million of annualised savings (net of National World management costs) during 2021 with restructuring costs of c.£4.0 million.

• Maintaining strong cash management with cash balances of £18.0 million at the end of the period, ahead of expectations.

• Monthly content provision revenue from Google and Facebook, commenced from January 2021.

• Year on year subscription revenue tripled to £0.6 million for the period.

• Streamlining the head office function and the creation of seven regional media units covering commercially homogeneous markets with the redeployment of several hundred staff.

• Technology investment to stabilise and enhance news websites.

• Portfolio enhancements including a new national online newsbrand, nationalworld.com, with 3.5 million page views in the first full month of launch, which exceeded expectations.

• Leveraging existing Group resources for further online and print launches and relaunches resulting in circulation revenue stabilisation.

• Roll-out of subscription across 35 sites and trialling of a new subscription platform for premium content payment on a daily basis.

• Training and development of commercial teams in digital marketing skills.

The Group has commenced investment to stabilise the digital infrastructure, enhance its development capabilities and roll out SEO expertise across regions. It is now well positioned to make further investments and acquisitions to support its transformation and growth strategy.

Trading

The acquisition of JPI Media Publishing Limited and its subsidiaries was completed on 2 January 2021 and the estimated year on year revenue trends for the 21 week period ended 29 May 2021 are presented on a like for like basis assuming the business had been acquired at the beginning of 2020. 

The year on year trends are impacted by the COVID 19 pandemic which resulted in the first national lockdown during March 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.

	Actual Q1 %	Estimated April and May %	Estimated YTD %	Estimated YTD £m
Print*	(21)	13	(11)	28.9
Digital**	(1)	60	18	4.7
Other	(4)	4	(1)	0.6
Total revenue	(18)	18	(8)	34.2

*Print revenue includes all print driven revenue and all print led packaged revenue with digital and government Covid-19 advertising spend (print and digital)

**Digital revenue includes all digital driven revenue and all digital led packaged revenue with print

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%, circulation revenue is 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% during the period as subscriptions were rolled out across all the daily newspaper websites during the course of 2020. In addition, in the last month 21 weekly papers have introduced digital subscriptions. Other digital revenue grew by 26% during the period and includes the benefit of content provision revenues from Google and Facebook which have generated revenue of c.£100k per month from February 2021.

The Group has invested in technology and strengthened its legacy systems during the period. Digital audience has stabilised during the course of May and returned to growth with estimated page views of 110 million for the month. Management anticipates growth on this stronger base as we progress through the year with incremental growth driven by further online launches.

Financing update

The Group held cash balances of £18.0 million at the end of May with £1.0 million outstanding loan note debt, £5.0 million deferred consideration on the acquisition of JPI Media and IFRS 16 Lease liabilities of £2.8 million.

Outlook

Good progress continues to be made on the transformation of the JPI Media business and the Board is confident that performance for 2021 will be in line with its expectations.

We continue to explore opportunities to deploy our considerable balance sheet strength through earnings enhancing investments and acquisitions.

David Montgomery, the Chairman of National World commented on the trading update:

'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.'

A management presentation on the trading update will be made available on our website, nationalworldplc.com.

For the purposes of UK MAR the person responsible for arranging for the release of this announcement on behalf of National World is Vijay Vaghela, Chief Operating Officer.

- Ends -

Enquiries:

National World plc c/o Montfort Communications David Montgomery Vijay Vaghela	[phone]
Montfort Communications - Financial PR & IR Nick Miles Olly Scott	[phone] [phone]

Forward-looking statements

This announcement may include statements that are, or may be deemed to be, "forward-looking statements".  These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology.  These forward-looking statements include matters that are not historical facts.  They appear in a number of places throughout this announcement and include statements regarding the directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets.  By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances.  Actual results and developments could differ materially from those expressed or implied by the forward-looking statements.  Forward-looking statements may and often do differ materially from actual results.  Any forward-looking statements in this announcement are based on certain factors and assumptions, including the directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity.  Whilst the directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect.  Save as required by applicable law or regulation, the Company undertakes no obligation to release publicly the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in the directors' expectations or to reflect events or circumstances after the date of this announcement.

 

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