REG - National World PLC - Pre close trading update

National WorldAnnouncement

18/01/2024 07:00

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RNS Number : 0757A  National World PLC  18 January 2024

National World plc

 

("the Company" or the Group")

 

 

Pre close trading update for the year ended 30 December 2023

 

 

FY23 Adjusted EBITDA* to exceed £9.0 million and will be above expectation

 

FY23 revenue expected to exceed £88.0 million, up 5%

 

Digital revenues increased by 13% (20% in H2)

 

Strong, debt-free balance sheet with a cash balance of £10.7 million as at 30
December 2023

 

 

Highlights

 

                      FY23  FY22  YOY
                      £m    £m    %

 Total Group Revenue  88.0  84.1  5

 Digital              18.4  16.3  13
 Circulation          30.6  31.6  -3
 Print Advertising    30.6  30.9  -1
 Events               3.9   1.4   176
 Other^               4.5   4.0   13

 

National World Chairman, David Montgomery, said:

 

"In 2023 the Group completed seven acquisitions of iconic and premium brands
strengthening our portfolio, particularly in the events and business
information sector. Our greater scale, combined with significant investment in
innovation and automation, underpins our accelerating transition to a
multi-platform content business, focused on creative and expert talent.

 

"We continue to re-train and re-equip both editorial and commercial staff to
serve all platforms, including TV and video. Our sector consolidation of
heritage brands has strengthened our expertise both geographically and by
content genre, helping to distinguish us in news provision but also in the
areas of information and entertainment. The short term augmentation of
revenues will help propel a new sustainable model that will be evidenced
during 2024 with the launch of a number of key initiatives now at an advanced
stage of development.

 

"Given our scalable infrastructure the company will continue to seek to take
advantage of further acquisitions that release significant synergies. Absent
that, the 2024 trajectory is for revenues in excess of £100 million and an
increased EBITDA margin."

 

Trading

 

Revenue for full year 2023 is expected to be not less than £88.0 million,
underpinned by robust digital revenue growth of 13% with print revenue
declining by 2% compared with the previous year.

 

Digital revenue improved by 13% overall, with growth of 20% in the second half
of the year benefiting from acquisitions, stronger yields and increased video
advertising. In the period the Group achieved average monthly page view growth
of 25% with an average audience of 139 million, compared to 111 million in the
prior period. Page view growth was 21% in the first half, followed by 30%
growth in the second half, aided by acquisitions.

 

Print advertising revenue declined by 1%, circulation revenue by 3% reflecting
the continued subdued consumer confidence in the UK economy because of higher
inflation and interest rates.

 

Events revenue will be reported separately in the 2023 annual results, having
previously been reported across both print advertising and other print
revenues.  Events is a key strategic growth area for the group and the year
on year revenue growth can be attributed to the strategically important
acquisition of Insider Media, completed in April 2023.

 

The Group has managed costs carefully throughout the year enabling it to
support digital investments, mitigate the impact of inflationary cost
pressures and also moderate the decline of heritage print revenue.

 

Targeted annualised cost savings of £6.0 million were achieved. Non-recurring
costs for the period were £5.5 million including £3.9 million restructuring
costs and £1.6 million incurred on advisory costs for completed and potential
acquisitions.

 

Operational highlights

 

·      For the seven acquisitions completed in the period, the Group
paid a total consideration of £14.4 million, (£13.0 million consideration
net of cash acquired) funded from its existing cash resources. These
contributed revenues of £10.6 million and adjusted EBITDA of £1.7
million in the period, with the bulk of this flowing in the second half.

 

·      Momentum behind our fast-growing video segment continues to build
as our customer proposition transitions towards watching as well as reading.
We now create large volumes of original, high-quality video produced by our
network of journalists alongside user generated content and distributed across
our website portfolio as well as social media and partner platforms. In 2023
continuing growth in output and audience supported annual revenue growth of
over 50%. Our audience for video has grown by 18%, with 421 million video
views on Group channels in 2023, compared to 357 million in 2022.

 

·      In H2 2023 we launched a TV brand - Shots! - to further leverage
our content model, showcase our talent in longer form formats, and bring our
content to viewers in high engagement environments. The brand currently airs
on Freeview channel 276 as well as both live and on demand on ShotsTV.com.
Shots! has already added over 35,000 hours of viewing to our audience
engagement over the initial September-December period.

 

·      We started in 2023 a process of refocusing and upgrading our
digital offering, with new apps and websites being introduced, starting with
the premium brands, The Scotsman, Yorkshire Post and the Newsletter. The
Scotsman achieved a 7% annual subscription growth in 2023 since the changes.
With the new products now in place we are well set up to increase our loyal
customer base even further in 2024, despite the possible market changes to
cookies.

 

·      As part of our transition to a sustainable operating model and
the focus on talent and expert and original content, the Company is
redeploying its journalists on the basis of individual specialisms that will
sharpen the competitiveness of the business and promote career advancement.

 

Financial position

 

The Group maintains a strong financial position with a cash balance of £10.7
million at the year end, after paying £13.0 million consideration for the
acquisitions completed in the period, (net of cash acquired) repayment of the
final tranche of the £2.5 million deferred consideration payable as a result
of acquiring JPIMedia Publishing Limited and its subsidiaries and repayment of
£1.0 million of loan notes, making the Group debt free.

 

The Board expects to recommend a final dividend in conjunction with the
release of its audited results for the year ended 30 December 2023 on 21 March
2024.

 

Outlook

 

For 2024, we expect to deliver revenues in excess of £100 million and
improved EBITDA margin.

 

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 30 December
2023 on 21 March 2024.

 

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

^Comprises editorial funding, press computer systems and other print revenue.

 

- 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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