REG - National World PLC - Pre close trading update

National WorldAnnouncement

17/01/2023 07:00

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RNS Number : 9030M  National World PLC  17 January 2023

National World plc

 

("the Company" or the Group")

 

Pre close trading update for the year ended 31 December 2022

 

FY22 Adjusted EBITDA ahead of market expectation with a high single digit
increase

Digital revenues up 25%

Board to propose maiden dividend

 

Highlights

 §   FY22 revenue expected to be not less than £84.0 million
 §   FY22 Adjusted EBITDA* expected to be not less than £9.4 million
 §   Strong balance sheet with a cash balance of £27.0 million held as at 31
     December 2022

 

National World's Chairman, David Montgomery, said:

"We have accelerated the Group's transformation into a premium content and
sales business across all platforms in 2022. We continue to launch new
products, invest in organic growth, enhance heritage assets and streamline our
infrastructure to create further efficiencies.

 

"Management is pursuing opportunities to build scale and enhance shareholder
value through targeted investments and acquisitions. Two online content
acquisitions completed at the end of 2022, Scoopdragon and Newschain, have
immediately increased National World's online audience by over 10 per cent.

 

"We look ahead into 2023 with confidence given our rapidly evolving operating
model to restore revenue growth and we maintain our expectations for the
Group's performance."

 

Trading

Revenue for full year 2022 is expected to be not less than £84.0 million,
underpinned by robust digital revenue growth of 25% with print revenue
declining 7% compared with the previous year.

 

Digital revenue growth was lower in the second half of the year at 12% as a
consequence of market and audience volatility, combined with the impact of
changes to Google's search algorithm. However, the impact on revenues was
mitigated by stronger yields and increased video advertising.

 

Print advertising revenue declined by 6% and circulation revenue by 9%
reflecting subdued consumer confidence in the UK economy because of rising
inflation and interest rates.

 

The Group has managed costs carefully throughout the year enabling it to
support digital investments and mitigate the impact of increased newsprint
prices and other inflationary cost pressures.

 

Financial position

The Group maintains a strong financial position with the cash balance
increasing by £4.0 million to £27.0 million as at the year end, after
investment and repayment of the first tranche of the £2.5 million deferred
consideration payable as a result of acquiring JPIMedia Publishing Limited and
its subsidiaries ("JPI Group"). In 2023 the Company will pay the second and
final tranche of £2.5m deferred consideration for JPIGroup, and repay £1.0m
of loan notes, making the Company debt free.

 

The strength of Group performance, current outlook and prospects has enabled
the Board to consider the Company's dividend policy and the Board expects to
propose and recommend a maiden dividend in conjunction with the release of its
audited results for the year ended 31 December 2022 on 16 March 2023.

 

Operational progress

Management has accelerated the digitisation of its operations and in 2023 will
introduce further technological enhancements to deepen engagement with
customers across a wider content agenda. This will be accompanied by the
launch of new products for advertisers to attract sustainable, long-term
revenues.

 

Operational highlights:

 §   Launch of the Peopleworld and 3addedminutes websites, and a US version of
     nationalworld.com creating a global footprint for the business
 §   Investment of USD $1.25 million in social-first media company, The News
     Movement, in October 2022 to provide National World's audiences with
     high-quality, fact-based, engaging news and useful information on platforms
     including TikTok, Instagram, YouTube, Twitter and Snap
 §   Two acquisitions completed in December 2022 of independent digital football
     publisher ScoopDragon and video-first content innovator, NewsChain as part of
     its strategy to develop new formats and increase the size of its customer base
 §   Delivered targeted annualised cost savings in excess of £4.0 million, with
     restructuring costs of approximately £3.0 million expensed in the period.

 

Outlook

The Group is currently accelerating the implementation of its new operating
model, focused on building a fully digitised customer-driven business creating
sustainable premium content and sales whilst maintaining performance in the
near term.

 

Management continues to pursue acquisition opportunities, primarily targeting
businesses that will enhance the Group's digital capability.

 

National World will release its audited results for the year ended 31 December
2022 on 16 March 2023.

 

 

*Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation,
implementation of IFRS16 and non-recurring items.

 

- Ends -

 

Enquiries:

 

 National World plc

 David Montgomery

 c/o Montfort Communications

 Dowgate Capital Limited       +44 (0)20 3903 7715

 David Poutney

 James Serjeant

 Montfort Communications

 Nick Miles                    +44 (0)77 3970 1634

 Olly Scott                    +44 (0)78 1234 5205

 

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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