REG - National World PLC - Results for the year ended 28 December 2024
21/03/2025 07:15
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RNS Number : 5790B National World PLC 21 March 2025
National World plc
("National World", "the Group" or the "Company")
Results for the year ended 28 December 2024
FY24 Adjusted EBITDA of £11.2m
Digital revenues up 7%
Closing cash balance of £10.9 million with £4.3 million owed
Highlights
Adjusted results* Statutory results
2024 2023** Change 2024 2023** Change
£m £m £m £m
Revenue 96.0 88.0 9% 96.0 88.0 9%
Digital Revenue 19.6 18.4 7% 19.6 18.4 7%
EBITDA - continuing operations 11.2 9.4 19% 7.1 4.4 60%
Operating profit - continuing operations 10.7 9.0 19% 4.2 2.6 65%
Profit before tax - continuing operations 11.1 9.6 16% 4.5 3.1 47%
Profit before tax - discontinued operations - - n/a 1.2 - n/a
Earnings per share (pence) 3.1p 2.8p 11% 1.0p 1.0p -3%
Dividend per share (pence) - - - 0.20p 0.55p -64%
* Adjusted results are before non-recurring items, amortisation of intangible
assets and implementation of IFRS 16. 2024 Statutory EBITDA has been
adjusted for the £0.1 million Newschain digital intangible asset impairment
which is included in non-recurring costs of £4.3 million for 2024.
** 2023 results have been restated due to the classification of Press Computer
Systems Limited revenue and costs as discontinued operations. 2023 Statutory
EBITDA has been adjusted for the £0.1 million ROUA impairment for vacated
office space of which is included in non-recurring costs of £5.4 million in
2023.
A reconciliation between Statutory and Adjusted results is presented in Note
19.
Commenting on the results, Chairman David Montgomery, said:
"National World has again increased profits while widening its footprint and
its content offering across all platforms.
"Acquisitions and launches, including the development of TV, events and social
media are driving a new sustainable model for local and national publishing.
"Revenue growth, particularly in digital, has been propelled by local video
advertising, across our new World online metropolitan brands and
nationalworld.com.
"Automation through AI and other efficiencies in the production areas have
released resources to focus on specialised monetisable content, particularly
in sport, business and lifestyle.
"We continue to progress our commitment to building the company through
consolidation and innovation while constantly increasing productivity and
nurturing talent.
"These good 2024 results have been achieved despite the combined headwinds of
macro-economic challenge and non-trading distractions. I would like to pay
tribute to all National World staff for their efforts over the period."
Financial highlights:
● Robust revenue with growth of 9%, and a strong performance from
Digital +7% and Events +37%
● EBITDA from continuing operations up 19%, EBITDA margin increased
100bp to 11.7%
● Annualised costs savings of £2.9 million, with restructuring
costs of £1.8 million expensed in the period.
● Strong balance sheet with financial flexibility, closing cash
balance of £10.9 million at 28 December 2024 (2023: £10.7 million), after
dividends paid in the period totalling £2.0 million, and despite £4.3
million of cash withheld by Media Concierge.
Operational highlights:
● The National World events programme continued its impressive
growth throughout 2024 delivering 150 events targeting a wide range of
sectors, with revenue growth of 37% of year-on-year. Events now represents
over 5% of group revenue.
● Digital subscribers in the National World portfolio increased by
17% in 2024, with a 13% improvement in digital subscriptions revenues versus
2023.
● Our first paid newsletters gained traction in two of our key sport
markets and our premium national/large regionals sites The Scotsman and
Yorkshire Post saw a rise in the number of high value annual packages sold in
the final part of the year, driven by our New York Times bundle and a trend of
improving engagement on our digital apps.
● National World's YourWorld social media network
(https://www.yourworld.net/ (https://www.yourworld.net/) ) expanded to 1,000
UK geographies in February 2025. Registered contributors to YourWorld now
number 45,000 and over 147,000 contributions have been received.
● The Group's customer proposition continues to evolve towards
'watch' as well as 'read'. In 2024, 78% of our online articles included
video content. This was supported by continued growth in output capacity,
with over 250 journalists now trained and kitted to produce video, and in
ongoing quality improvements spearheaded by the Group's participation in the
TV market via Shots!. As a result average viewing time per video increased
by 7%, supporting annual video revenue growth of 12%, driven by yield
improvements.
● As the Group continues to expand the formats in which it creates
content, and the channels through which it reaches its customers, in 2025 we
will begin to measure our overall audience reach in terms of the time spent
with our brands. Over time this will replace channel-specific measures such
as page views in terms of Group wide reporting. 2024 saw over 134 million
average monthly page views, down 3% year-on-year with the trend improving to
flat in Q4 2024.
● Three acquisitions were completed in the period, with Athletics
Weekly acquired in May, Serious About Rugby League website acquired in July
and The Business Magazine Group Limited, an events and business content
specialist, acquired in November. Collectively they will contribute revenues
of £2.0 million and adjusted EBITDA of £0.2 million in 2025. The Group
paid a total consideration of £0.9 million for the acquisitions.
Current trading and outlook
As is usual in circumstances where a takeover offer is active, the Board have
elected not to give future performance outlook guidance. The Board
nevertheless maintains its guidance that the Company will meet its
expectations for the full year.
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
Neil Craven +44 (0)78 7647 5419
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.
Chairman's statement
National World completed its fourth year of operations with another record
profit. A life-time summary of the company's financial performance is
impressive given the structural change in the news media sector.
In total National World has raised £26 million of funds and at the period-end
had £10.9 million cash, plus another £4.3 million owed to it by Mediaforce.
In addition, National World paid £2.0 m million in dividends to shareholders
during 2024. The net investment on acquisitions over the four years totalling
£24 million has created a business approaching £100 million in revenues and
£11.2 million of Adjusted EBITDA in 2024 with a growth trajectory in
digital sales, video, events and business information.
When National World acquired the remnants of Johnston Press in January 2021
the assets were entirely regional print and online news products including the
historic Yorkshire Post and The Scotsman. The portfolio was limited to five
geographical areas.
Today National World brands cover the entire UK and are present on all
platforms including TV. The city and metro World brands are in all major
cities including London and the Shots! TV channel has national distribution on
Freeview.
One-third of our online use is video and we are now serving more than 1,000
towns on our Your World social media platform ((https://www.yourworld.net/
(https://www.yourworld.net/) ) that reaches an average 12,000 specific
locations weekly. This huge increase in activity has been supported by a
workforce reduced by 20 per cent over the four years as automation has removed
and streamlined many legacy processes.
One thousand pages a week are made up using AI production and this will expand
to over 20 per cent of all editorial output as we look forward.
National World is now focused on monetisable, unique content with expert
editorial, technical and commercial staff serving specific audiences and
advertisers more effectively.
This performance has been driven by a mix of acquisition, innovation and
launches. During the last year the investment in creating a sustainable and
monetisable content business across all platforms has intensified.
Our overall revenue has grown 9 per cent and digital is up 7 per cent whereas
our nearest national and regional news media comparator is down by 6 per cent
and up only 2 per cent respectively. In addition, our events business revenue
has grown by 37 per cent.
In recent months the Company's financial advisors have been asked to consider
the dysfunction of the small cap market, with the unprecedented outflow of
institutional funds, that impacts and limits the valuation of the business and
its potential. The advisors have also been requested to examine the prospects
of the Company in light of its investments in innovation, particularly in
social media and automation. The benefits of further consolidation have also
been documented. Management anticipates further revenue enhancements as a
result of the establishment of the Digital Markets Unit that will oversee
payment for content from the major platforms such as Google and Meta.
An ongoing reorganisation is being driven by the following key elements:
· The gradual switch from geographical divisions to vertical units
based on content and platform
· Focus on growth business units of events, sports, business
information, TV and video
· Pivoting of talent to specialist original content, monetisable on
all platforms
· Freeing talent from low level tasks using AI driven automation
· Rapid development of a social media platform to win back the
local marketplace
The investment in this strategy is evolving a sustainable growth model that
transforms both the heritage and new brands of National World and challenges
the hegemony of the global platforms.
Operational highlights
· The National World events programme continued its impressive
growth throughout 2024 primarily driven by the impact of acquisitions, with a
full year of trading of Insider Events and the introduction of events linked
to MNA Media. This contributed to a 37% year on year increase in revenue from
£4.1 million in 2023 to £5.6 million in 2024. Excluding the performance
driven by acquisition the sector as a whole continues to perform well with
an average of circa 7% year on year organic growth. Overall, the team
delivered 150 events in 2024 targeting a wide range of sectors. Looking ahead
we anticipate continued expansion in this area, through the recent
acquisition of The Business Magazine which was completed in November 2024,
and combined with our organic growth is set to deliver another strong
performance for this category in 2025.
· The number of paying digital subscribers in the National World
portfolio increased by 17% in 2024, with a 13% improvement in
digital subscriptions revenues compared to 2023. The growth is driven by
the launch of new subscription packages to MNA brands in late 2023, the
launch of ad-light digital subscription options across the remainder of our
weekly portfolio, increasing - but still modest - content restriction across
our city titles.
· Our first paid newsletters gained traction in two of our key
sport markets and our premium national/large regionals sites The Scotsman and
Yorkshire Post saw a rise in the number of high value annual packages sold in
the final part of the year, driven by our New York Times bundle and a trend of
improving engagement on our digital apps.
· The Group distributed 27.6 million paid for newspaper copies, 7.3
million free copies and 0.6 million magazines (2023: 27.9 million paid, 4.6
million frees, 0.4 million magazines) with continued innovation from our
journalists and design teams.
· The new National Advertising arrangements commenced on 1 October
2024 with Reach plc and Axiom Media Alliance (AMA). The print packages
delivered an increase in major clients from just 11 in 2023 to 35 in 2024.
· 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 daily volumes of original, high-quality video produced by
our network of journalists alongside user generated content and distributed
across our website portfolio. In 2024, 78% of our online articles included
video content. This was supported by continued growth in output capacity,
with over 250 journalists now trained and kitted to produce video, and in
ongoing quality improvements spearheaded by the Group's participation in the
TV market via Shots!. As a result average viewing time per video increased by
7%, supporting annual video revenue growth of 12%, driven by yield
improvements.
· 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. Shots! is distinctive in
the TV market by specialising in authentic, UK focused entertainment, with key
shows including 'Unconventional Brits' and 'True Crime: Cold Cases'. The brand
currently airs on Freeview channel 262 as well as both live and on demand on
ShotsTV.com. In 2024 Shots! has more than trebled its audience (Dec vs Jan)
and is now among the group's Top 15 digital brands by audience.
Acquisitions and disposal
· In May 2024 we completed the acquisition of Athletics Weekly
Limited, as part of our strategy to focus on higher-value, specialist content.
Athletics Weekly is the leading global content platform for athletics with
content ranging from the sport's grass roots through to the elite professional
level. AW publishes online, via social media platforms, newsletters and a
monthly print magazine. It generates 10 million monthly social impressions,
350,000 monthly unique visitors and has 229,000 Facebook followers. AW has a
stable circulation base and is growing its digital and print subscription
audience
· In July we acquired Serious About Rugby League (SARL) which has
become one of the leading rugby league websites since its launch in 2012.
Since 2017 it has grown into a profitable digital business generating more
than 20m page views in each of the past four years. The site brings with it a
large and passionate following in geographies where National World has
established brands able to support the continued growth of the site.
· November saw the acquisition of The Business Magazine Group
Limited, ("TBMG") further advancing our strategy to become the most
comprehensive platform for business and company news and information across
the regions of the United Kingdom. This acquisition has effectively doubled
Insider Media's audience across the key regions of the South East and South
West, solidifying our presence in these vital business hubs. Incorporating
TBMG's expert journalists into the Insider team demonstrates our commitment to
delivering high-quality business content and ensures that our audience in
these regions receives an even better, more in-depth service. This move
clearly significantly enhances our Events offering, a key growth category for
National World. TBMG operates twelve market leading events which will help
accelerate growth and further strengthen our market position in one of the
UK's most important business territories.
· The Group disposed of Press Computer Systems Limited ("PCS") to
Naviga 1 UK Limited, ("Naviga") on 31 March 2024, which it had acquired six
months earlier as part of the Midland News Association, ("MNA") acquisition.
The Group has recorded a £1.0 million gain on the disposal of PCS in the
Statutory Discontinued Operation results. Consideration of £3.5 million was
received in the form of service credits which the Group will utilise against
the five-year software agreement it has with Naviga. From 1 July 2024 onwards,
the Group benefits from a reduced adjusted operating cost base and cash
outflow, which is expected to benefit the next four to five years until the
£3.5 million service credit is fully utilised. PCS is disclosed as
discontinued operations in both the 2024 results and comparative.
Trading
The Group delivered a strong performance despite the challenging
macro-economic environment, with revenue of £96.0 million and adjusted EBITDA
of £11.2 million. Highlights of the financial performance are:
· Strong performance despite the challenging trading environment
with revenue up 9% to £96.0 million.
· Adjusted Operating profit of £10.7 million and adjusted EBITDA
of £11.2 million, (Adjusted EBITDA margin 11.7%).
· Robust digital revenue growth, up 7% year-on-year to £19.6
million. Digital subscription revenues grew by 13%, driven by 17% volume
growth. Digital advertising revenue grew by 4% year on year, benefiting from
the full year ownership of acquisitions made in 2023. Advertising revenue is
predominantly driven by audience and the Group had average monthly Page Views
(PVs) of 134 million (2023: 139 million PVs), a decline of 3% including
acquisitions or 11% decline excluding acquisitions. In 2024, video revenue has
grown to £1.7m, 12% year-on-year growth.
· Print advertising revenue increased by 12% reflecting the full
year benefit of acquisitions made in late 2023, and the national advertising
contract changes in late 2024.
· Circulation revenues were strong, reporting 7% growth
year-on-year.
· Incremental cost savings of £0.8 million were delivered in the
period with restructuring costs of £1.8 million. The restructuring and other
cost saving actions are expected to generate £2.9 million of annualised cost
savings.
Adjusted EBITDA increased to £11.2 million (2023: £9.4 million) with an
Adjusted EBITDA margin of 11.7% (2023: 10.7%). Tight management of working
capital ensured the Group delivered an operating cash flow of £8.2 million
(2023: £8.0 million) before the payment of non-recurring costs of £2.4
million (2023: £3.6 million). Adjusted financing income was £0.4 million
(2023: £0.6 million) and statutory financing income was £0.3 million (2023:
£0.5 million cost) including IFRS 16 lease finance costs.
Statutory profit before tax of £4.5 million, is a £1.4 million increase on
the £3.1 million profit before tax reported in the prior period, due to a
higher operating profit of £0.5 million before non-recurring items, reduced
non-recurring items of £1.1 million partly offset by £0.2 million reduction
in interest income and expense. Adjusted profit before tax increased by 13%
year-on-year to £11.1 million.
The statutory earnings per share were 1.0 pence per share (2023: 1.0 pence per
share) and adjusted earnings per share for the period were 3.1 pence per share
(2023: 2.8 pence per share).
Financial position
The Group maintains a strong financial position with a cash balance of £10.9
million at the year end, after payment of the Group's dividend to
shareholders, totalling £2.0 million. In addition the Group is owed £4.3m
net by Mediaforce, the Company's previous advertising sales agent.
Scheme of arrangement
On 18 December 2024, the boards of National World and Media Concierge
(Holdings) Limited ("Media Concierge") announced the terms of an agreed
all-cash acquisition by Neo Media Publishing Limited, a newly incorporated
company wholly-owned by Media Concierge, for the entire issued, and to be
issued, ordinary share capital of National World not already owned by Media
Concierge (the "Acquisition"), to be effected by means of a Court-sanctioned
scheme of arrangement. (the "Scheme").
On 13 February 2025, Media Concierge announced that although Shareholders had
passed all of the resolutions required to implement the Scheme, the timetable
for implementation of the Acquisition has been impacted by a delay relating to
the consideration of the Acquisition by the Republic of Ireland Competition
and Consumer Protection Commission (the "CCPC"). As a result, the previously
planned Court sanction hearing for the Scheme previously scheduled for 6 March
2025 and Effective Date scheduled for 10 March 2025 were no longer achievable
- and the Effective Date of the Scheme has been delayed.
A notification was submitted to the CCPC by Media Concierge and Bidco on 24
February 2025. Under the statutory review process, the CCPC typically
provide confirmation within 30 working days of the date of the notification
either: (a) approving the Acquisition ("Phase 1 Clearance"); or (b) informing
the parties of its intention to carry out a further investigation of the
Acquisition ("Phase 2 Investigation").
Assuming the CCPC issue a Phase 1 Clearance (which is the current
expectation), Media Concierge and Bidco will then apply for a separate media
merger clearance to the Minister for Media in the Republic of Ireland (such
applications are generally dealt with expeditiously). Should timeframes run to
current expectations, the Scheme should become effective by 30 April 2025,
subject to Court availability. Any referral for a Phase 2 Investigation or
issuance of any RFI(s) by the CCPC without waiver by BidCo of the relevant
Condition to the Scheme would result in a further delay in the implementation
of the Scheme. The Company will continue to update shareholders and the market
in the usual way.
Dividend
As a consequence of the Acquisition, the Board is not at present proposing a
final dividend in respect of the 52 weeks ended 28 December 2024.
Board
Danny Cammiade resigned as a Non-Executive Director on 30 June 2024, at the
end of his three year service, and I wish to thank Danny for his contribution
and give recognition to his strong commitment to the media sector in his other
ongoing industry roles. David Fordham also resigned on 18 December 2024,
following the announcement made regarding the offer by Media Concierge
(Holdings) Limited who he represented on the Board. We were very pleased to
welcome Andrea Davies as a Non-Executive Director to the Board, an appointment
which took place on 22 April 2024.
Employees
On behalf of the Board I acknowledge the continued hard work and commitment of
colleagues across the Group, and particularly during the latter part of the
year which saw some inevitable distraction. I also want to welcome new
colleagues who have joined the organisation through acquisitions during the
course of 2024.
Outlook
As is usual in circumstances where a takeover offer is active, the Board have
elected not to give future performance outlook guidance. The Board
nevertheless maintains its guidance that the Company will meet its
expectations for the full year.
The agility and ingenuity of National World's staff has proved equal to past
challenges and the company believes that continuing efficiency measures,
including further automation, and focus on growing revenue streams will
deliver further progress in 2025.
National World continues to focus on the development of a sustainable
publishing business and we thank all our colleagues for their support as
the Group builds its activities and for providing their talent and creativity
at an individual level to optimise the collective effort despite the continued
economic and print media sector challenges.
David Montgomery
Executive Chairman
21 March 2025
Financial review
Introduction
This Financial review provides commentary on the Group's statutory and
adjusted results for the 52 weeks ended 28 December 2024 (2023: 52 weeks ended
30 December 2023).
Basis of presentation of results
Adjusted results are presented to provide additional clarity and understanding
of the Group's underlying trading. Adjusted results are before the
implementation of IFRS 16, the amortisation of intangible assets and
non-recurring items. A reconciliation between Statutory and Adjusted results
is shown in Note 19 which includes £0.3 million of deferred benefit service
credits utilised in relation to consideration from Naviga from the Press
Computer Systems ("PCS") disposal.
The statutory and adjusted financial information is consistently presented
across all periods for the Group, with a restatement of the prior year
comparatives to report Press Computer Systems ("PCS") as discontinued
operations, following its disposal on 31 March 2024 having been acquired on 29
September 2023.
The results for the period include Athletics Weekly, acquired on 31 May 2024,
SARL completed on 8 July 2024, and The Business Magazine Group Limited
acquired on 30 November 2024. The prior year comparatives include Insider
Media for 8 months, the Northern Ireland title acquisitions and Rotherham
Advertiser from their respective acquisition dates. The Midland News
Association acquisition was completed on 29 September 2023 so its results are
included in the comparatives for 3 months. A reconciliation from reported to
restated 2023 comparatives is shown in Note 21.
Results for the period refer to continuing operations until otherwise stated.
Results for the 52 weeks ended 28 December 2024
Adjusted results* Statutory results
2024 2023 2024 2023
£m £m £m £m
Revenue 96.0 88.0 96.0 88.0
Operating costs (84.8) (78.6) (84.7) (78.3)
Depreciation and amortisation (0.5) (0.4) (2.8) (1.7)
Operating profit pre non-recurring items 10.7 9.0 8.5 8.0
Non-recurring items - - (4.3) (5.4)
Loss from Joint Venture - - - -
Operating profit 10.7 9.0 4.2 2.6
Net finance income / (expense) 0.4 0.6 0.3 0.5
Profit before tax 11.1 9.6 4.5 3.1
Tax (charge) / credit (2.6) (2.2) (1.7) (0.4)
Profit after tax for continuing operations 8.5 7.4 2.8 2.7
Profit after tax for discontinued operations - - 0.8 -
Profit after tax for total operations 8.5 7.4 3.6 2.7
EBITDA for continuing operations 11.2 9.4 7.1 4.4
Earnings per share (pence) for continuing operations 3.1 2.8 1.0 1.0
*Adjusted results are before non-recurring items, amortisation of intangible
assets and implementation of IFRS 16.
2024 Statutory EBITDA has been adjusted for the £0.1 million Newschain
digital intangible asset impairment which is included in non-recurring costs
of £4.3 million for 2024.
2023 results have been restated due to the classification of Press Computer
Systems Limited revenue and costs as discontinued operations. 2023 Statutory
EBITDA has been adjusted for the £0.1 million ROUA impairment for vacated
office space of which is included in non-recurring costs of £5.4 million in
2023.
A reconciliation between Statutory and Adjusted results is presented in Note
19.
The Group delivered revenue of £96.0 million and adjusted operating profit of
£10.7 million (2023: £88.0 million and £9.0 million respectively)
reflecting an operating margin of 11.1% (2023: 10.3%). Adjusted EBITDA was
£11.2 million (2023: £9.4 million), reflecting an EBITDA margin of 11.7%
(2023: 10.7%).
Statutory operating profit was £4.2 million after non-recurring items of
£4.3 million after amortisation of publishing rights and titles and digital
assets (£1.8 million). A reconciliation from Statutory to Adjusted
operating profit is provided in Note 19.
Non-recurring items of £4.3 million includes £1.8 million restructuring
costs to deliver £2.9 million of annualised cost savings, £1.1 million
impairment of The News Movement (TNM), £1.3 million of legal advisory fees
relating to the recommended offer for the Company by Neo Media Publishing
Limited, (a wholly owned subsidiary of Media Concierge Holdings Limited),
strategic review and shareholder dispute and £0.1 million of impairment costs
in relation to The Newschain. Prior year non-recurring items totalled £5.4
million including £3.6 million restructuring costs, £1.2 million on
incomplete transaction costs.
Adjusted financing income was £0.4 million (2023: £0.6 million). Statutory
financing income of £0.3 million (2023: £0.5 million financing cost) offset
with the interest for IFRS 16 lease liabilities.
Adjusted profit before tax of £11.1 million is an improvement of £1.5
million compared to the prior year, with 2024 benefiting from the full year
ownership of acquisitions.
Statutory profit before tax was £4.5 million, compared to a prior year
Statutory profit before tax of £3.1 million for continuing operations. The
£1.4 million improvement is due to increased revenues, lower operating and
non-recurring costs.
The Statutory tax charge was £1.7 million, (2023: £0.4 million tax charge)
and includes £0.8 million corporation tax payable and £1.2 million reduction
in the deferred tax asset is primarily due to brought forward losses utilised
in the period against taxable profits. At the period end, the Group has
brought forward losses of £9.6 million recognised as a deferred tax asset
(2023: £17.9 million recognised). The adjusted tax charge of £2.6 million
(2023: £2.2 million) reflects an effective tax rate of 24% (2023: 23%) and
does not benefit from the brought forward tax losses so as to provide a more
meaningful and comparable financial result.
Earnings per share for the period for continuing operations were 1.0 pence per
share (2023: 1.0 pence per share). Adjusted earnings per share for the period
were 3.1 pence per share (2023: 2.8 pence per share). The increase in adjusted
earnings per share reflects the benefit from the full year ownership of
acquisitions contributing to the improved Group performance in the year.
Revenue
The table below provides a summary of revenue for the 52 weeks ended 28
December 2024 with comparatives for the 52 weeks ended 30 December 2023.
Revenue for 2023 has been restated for continuing operations following the
disposal of PCS in March 2024.
Revenue for the full year improved by £8.0 million to £96.0 million, a 9%
year on year increase with the benefit from full year ownership of
acquisitions offsetting the challenging trading environment.
2024 2023* Change Change
£m £m £m %
Print Publishing Revenue 69.2 63.6 5.6 9%
Advertising 33.9 30.4 3.5 12%
Circulation 32.7 30.6 2.1 7%
Other 2.6 2.6 - (2%)
Digital Publishing Revenue 19.6 18.4 1.2 7%
Advertising 12.0 11.6 0.4 4%
Subscriptions 1.7 1.5 0.2 13%
Other 5.9 5.3 0.6 11%
Other Revenue 7.2 6.0 1.2 21%
Editorial funding 1.5 1.8 (0.3) (17%)
Events 5.6 4.0 1.6 37%
Other 0.1 0.2 (0.1) (96%)
Total Revenue 96.0 88.0 8.0 9%
2024 and comparative 2023 revenues for continuing operations only. A
reconciliation from reported to restated 2023 comparatives is provided in Note
21.
Print revenue
Print revenue comprises all revenue driven by the local newspaper titles,
including all digital revenue packages sold with print. Print revenue
increased by 9% overall.
Print Advertising revenue increased by 12% year on year which reflected a 21%
increase in the first half falling to 4% growth in the second half of 2024.
Revenue growth was bolstered by £4.6 million year on year revenue
contribution from acquisitions made in 2023 (2024: £8.0 million, 2023: £3.5
million).
Circulation revenue increased by £2.1 million, an increase of 7% during the
period with an increase of 11% in the first half and growth of 3% in the
second half. Circulation revenue growth excluding acquisitions (West
Midlands, Northern Ireland & Rotherham) was a decline of 7%.
Average monthly circulation volumes in the period were 1.65 million for the
daily newspapers and 0.7 million for the weekly newspaper (2023: 1.57 million
and 0.8 million respectively) representing an improvement of 5% on dailies and
a decline of 14% on weekly titles (excluding the West Midlands titles acquired
Q4 2023, the year on year decline is 16% on both dailies & weeklies).
The Group continues to have a strong print subscriber base with print
subscription revenue of £3.1 million (reported within circulation revenue), a
3% year-on-year improvement.
Other print revenue, which includes syndication, leaflets and waste sales fell
by 2% (2023: 4% growth) with the full year ownership from acquisitions offset
by leaflet revenue decline.
Digital revenue
Digital revenue comprises all revenue sold programmatically, digital-led
direct sales, subscriptions, syndication and revenue generated from the Google
content initiatives.
Digital revenue increased by 7% year on year, with growth of 12% in the first
half, where the prior year comparatives didn't include the acquisitions of
Insider Media Limited and Midland News Association Limited until April and
September 2023 respectively.
Digital advertising revenue grew by 4% year on year, with revenue growth of
11% in the first half and a decline of 4% in the second half. Advertising
revenue is predominantly driven by audience and the Group had average monthly
Page Views (PVs) of 134 million (2023: 139 million PVs), a decline of 3%
including acquisitions or 11% decline excluding acquisitions. In 2024, video
revenue has grown to £1.7m, 12% year-on-year growth.
Subscription revenue has increased by £0.2 million (13%) year on year. The
number of paying digital subscribers and members increased by 17% in 2024,
with growth driven by the launch of new subscription packages to MNA brands in
late 2023, the launch of ad-light digital subscription options across the
remainder of our weekly portfolio, increasing content restriction across our
city titles, with a focus on exclusive court copy and the launch of our new
value price tier in our city markets during Q4 2024.
Our first paid newsletters gained traction in two of our key sport markets and
our premium national/large regionals sites The Scotsman and Yorkshire Post saw
a rise in the number of high value annual packages sold in the final part of
the year, driven by our New York Times bundle and a trend of improving
engagement on our digital apps. Overall this saw an 13% improvement in digital
subscriptions revenues versus 2023 and a total of £1.7m.
Other digital revenue grew by 11% year on year and includes revenue of £2.7
million from the Google news agreement and Meta News Innovation agreement
which ended in January 2024 (2023: £0.6 million Meta).
Other revenue
Editorial funding reflects grants from the BBC for local democracy reporters
for the funding of 34 journalists.
Events revenue grew 37% reflecting the contribution from Insider Media Limited
acquired on 30 April 2023. The National World events programme continued its
impressive growth throughout 2024 primarily driven by the impacts of
acquisitions, with a full year of trading of Insider events and the
introduction of events linked to MNA. This contributed to a 37% YOY
increase in revenue from £4.0 million in 2023 to £5.5 million in 2024.
Excluding the performance driven by acquisition the sector as a whole
continues to perform well with an average of circa 8% YOY organic growth.
Overall the team delivered 150 events in 2024 targeted a wide range of
sectors. Looking ahead we anticipate continued expansion in this area, through
the recent acquisition of The Business Magazine which was completed in
November 2024, which combined with our organic growth is set to deliver
another strong performance for this category in 2025.
Other revenue includes acquired transitional service agreements held by MNA.
Operating Costs
Operating costs for the 52 week period to 28 December 2024 are £85.3 million
on an adjusted basis and £92.0 million on a statutory basis.
Adjusted results Statutory results
2024 2023* 2024 2023*
For continuing operations £m £m £m £m
Labour 48.5 44.3 48.5 44.3
Newsprint and production costs 12.8 12.6 12.8 12.6
Other 23.5 21.7 23.4 21.4
Total operating costs 84.8 78.6 84.7 78.3
Depreciation and amortisation 0.5 0.4 2.8 1.7
Total operating costs before non-recurring costs 85.3 79.0 87.5 80.0
Non-recurring items - - 4.3 5.4
Total operating costs for continuing operations 85.3 79.0 91.8 85.4
*2024 and comparative 2023 costs for continuing operations only. A
reconciliation from reported to restated 2023 comparatives is provided in Note
21.
Adjusted operating costs include the deferred benefit of service credits
utilised in the period, and are before:
· the implementation of IFRS 16;
· the amortisation of intangible assets of £1.8 million; and
· non-recurring costs of £4.3 million.
During the period, the Group implemented a restructuring programme which
delivered in year savings of £0.8 million in 2024 and annualised cost savings
of £2.9 million.
Labour costs
The Group employed an average of 1,156 employees during the period, for
continuing operations, with 1,101 employees as at 28 December 2024 (2023:
1,163 employed during the period for continuing operations and 1,226 employees
at 30 December 2023). The Group has acquired 300 employees across the 11
acquisitions completed in the past two years. The 1% overall reduction in the
average number of employees in the Group includes the impact of the full year
ownership of acquisitions, offset by a 12% reduction in the remaining
workforce.
Newsprint and production costs
Newsprint and Production costs continue to be tightly managed however they
have increased marginally year-on-year with costs impacted by the full year
ownership of acquisitions with some mitigation from lower print volumes and
lower pagination.
Newsprint costs have reduced by £0.8 million year-on-year with the benefit of
lower newsprint prices which have reduced by 20% (2023: 5%). Newsprint
costs excluding the titles acquired in 2023, would have fallen £1.2 million
(31%).
Production costs have increased by £1.0 million year on year (-12%) with
costs from titles acquired in 2023 contributing to £1.9 million of the
increase; excluding these production costs in the remaining business have
reduced by £0.9 million (11%).
Depreciation and amortisation
Adjusted depreciation relates to the tangible fixed assets, including computer
equipment and property infrastructure, with a charge of £0.5 million for the
period (2023: £0.4 million). Statutory depreciation and amortisation is £2.3
million higher and includes amortisation of intangible assets of £0.9
million, amortisation of Digital Publishing assets of £0.8 million and
depreciation of Right of Use Assets (ROUA) of £0.4 million.
Other
Other costs comprise events costs, property, IT, digital product,
administration and other operating costs. Adjusted costs of £23.5 million
are £0.1 million higher than Statutory other costs as they are before £0.4
million of IFRS 16 costs offset by £0.3 million deferred consideration
benefit from service credits utilised.
Non-recurring items
Non-recurring items of £4.3 million (2023: £5.4 million) comprise of:
2024 2023*
£m £m
Restructuring and redundancy costs 1.8 3.6
Impairment of The News Movement 1.1 -
Impairment of intangible assets 0.1 -
Incomplete acquisition costs - 1.2
Legal and advisory costs 1.3 -
Acquisition transaction costs - 0.4
Property rationalisation - 0.1
ROUA impairment - 0.1
Total Non-recurring items 4.3 5.4
*2024 and comparative 2023 costs for continuing operations only. A
reconciliation from reported to restated 2023 comparatives is provided in Note
21.
Non-recurring items include:
· £1.8 million restructuring and redundancy costs have delivered
in year savings of £0.8 million and annualised savings of £2.9 million.
Restructuring costs of £1.1 million have been paid in the period relating to
the period with the remaining £0.7 million payable in 2025. A further £1.3
million was paid in the period, that had been fully accrued at the end of
2023;
· £1.3 million of professional advisory fees were incurred in the
period in relation to the recommended offer for the Company by Neo Media
Publishing Limited, (a wholly owned subsidiary of Media Concierge Holdings
Limited), shareholder legal dispute and strategic review;
· £1.1 million impairment of The News Movement investment to nil
value.
Financing (income)/expense
Net finance (income)/expense on a statutory and adjusted basis are:
Adjusted results Statutory results
2024 2023 2024 2023
£m £m £m £m
Interest income (0.4) (0.7) (0.4) (0.7)
Interest expense from leasing arrangements - - 0.1 0.1
Interest on unsecured loan notes - 0.1 - 0.1
Net finance (income)/expense (0.4) (0.6) (0.3) (0.5)
Interest income of £0.4 million was earned from cash held on deposit with
Barclays Bank attracting interest at the BOE base rate less 5 basis points for
the majority of 2024 (2023: £0.7 million).
Interest expense of £nil million on the interest-only unsecured loan notes
(2023: £0.1 million). The loan notes were fully repaid in December 2023 and
there were no loan notes held in 2024.
Statutory finance expense includes £0.1 million interest charge on IFRS 16
lease liabilities (2023: £0.1 million).
Profit before tax
Statutory profit before tax of £4.5 million is £1.4 million higher than the
2023 Statutory profit before tax of £3.1 million, due to improved operating
profit and lower non-recurring costs.
Adjusted profit before tax of £11.1 million is before non-recurring items,
the implementation of IFRS 16 and amortisation of intangible assets (2023:
£9.6 million).
Statutory tax credit and effective tax rate
The statutory tax rate for the period is 25% (2023: 23.5%), in line with the
corporate tax rate changing to 25% from 1 April 2023, as substantively enacted
by parliament in May 2021.
For Continuing Operations, a statutory tax charge of £1.7 million (38%
effective rate) relates to non-deductible corporate advisory fees the
impairment of The News Movement investment and group relieving gains in
Discontinued operations. The deferred tax asset reduction of £1.3 million
materially relates to brought forward losses utilised in the period against
taxable profits.
The net deferred tax asset of £1.2 million includes £2.4 million of tax
losses (gross brought forward losses of £9.6 million calculated using a
corporate tax rate of 25%), and £0.6 million of other deferred tax assets
offset by £1.8 million of deferred tax liabilities relating to intangible
assets.
Continuing Operations Adjusted profit before tax is £11.1 million and the
adjusted tax rate is 24% with a £2.6 million adjusted tax charge in the
period (2023: £9.6 million profit before tax, £2.2 million tax charge, 23%
adjusted tax rate). The adjusted tax charge does not benefit from the brought
forward tax losses so as to provide a more meaningful and comparable financial
result.
For Discontinued Operations, the £0.4 million tax expense (29% effective
rate) relates to disallowed expenses including disposal costs of £0.2 million
and the write-down of intangible and tangible assets of £1.0 million for
which the allowable deduction has already been taken in prior periods by the
former owner of the assets, offset by the benefit of group relief transfers.
EBITDA
Statutory EBITDA for 2024 is £7.1 million (2023: £4.4 million), while
adjusted EBITDA is £11.2 million for the period (2023: £9.4 million). The
higher adjusted EBITDA, compared to statutory EBITDA, reflects the
restructuring driven operating costs of £1.8 million in the period, and other
non-recurring items totalling £2.5 million which are added back for adjusted
reporting purposes.
Earnings per share
Statutory earnings per share for the period were 1.0 pence per share (2023:
1.0 pence per share).
Adjusted earnings per share for the period were 3.1 pence per share (2023: 2.8
pence per share).
Reconciliation of statutory to adjusted operating profits
To ensure that the financial statements provide appropriate insight into the
underlying performance of the Group, additional disclosure has been made on
the financial impact of a number of significant accounting and operational
items and therefore adjusted results are presented.
The adjustments include the cost of restructuring and organisational change,
acquisition and capital raise costs, amortisation of intangible assets and the
impact of implementing IFRS 16. Management believe that it is appropriate to
additionally present the Alternative Performance Measures used by management
in operating the business, as this presents a more meaningful and comparable
financial result.
The adjusted results provide supplementary analysis of the 'underlying'
trading of the Group. The table below presents a reconciliation between
statutory and adjusted results:
2024 2023*
£m £m
Statutory operating profit 4.2 2.6
Operating cost charge for IFRS 16 leases (0.4) (0.3)
Depreciation on right of use assets 0.4 0.4
Amortisation of intangible assets 1.9 0.9
Deferred benefit service credits utilised 0.3 -
Non-recurring items 4.3 5.4
Adjusted operating profit 10.7 9.0
Depreciation on tangible assets 0.5 0.4
Adjusted EBITDA 11.2 9.4
*2024 and comparative 2023 operating profit reconciling items are for
continuing operations only. A reconciliation from reported to restated 2023
comparatives is provided in Note 21.
The reconciling items are:
· the implementation of IFRS 16 resulted in a lower charge for
other overheads for leasing costs, increase in depreciation of ROUA and a
finance charge for the IFRS 16 lease liabilities. To ensure there is no
distortion to underlying EBITDA, the IFRS 16 entries have been reversed so the
full cost of IFRS 16 leases is included in other costs. Without this change
EBITDA would be enhanced by £0.4 million (2023: £0.3 million);
· the amortisation charges of intangible assets were £0.8 million
for publishing rights and titles (2023: £0.5 million), £0.9 million for
digital assets (2023: £0.4 million) and £0.2 million for brand and customer
intangibles (2023: £0.1 million);
· £4.3 million of non-recurring items (2023: £5.4 million);
· £0.3 million of deferred benefit service credits relating to the
deferred consideration arising from the disposal of PCS. Without this change
EBITDA would be £0.4 million lower. The adjustment reflects the benefit to
the ongoing business from the service credits which will be utilised from 1
July 2024 against the 5 year IT contract held with Naviga.
Balance sheet
As at As at
28 December 2024
30 December 2023
£m £m
Non-current assets 29.5 30.4
Current assets 30.8 26.0
Assets classified as held for sale - 1.0
Total assets 60.3 57.4
Current liabilities (22.3) (21.6)
Non-current liabilities (0.4) (0.2)
Liabilities classified as held for sale - (0.1)
Total liabilities (22.7) (21.9)
Net assets 37.6 35.5
Net assets increased by £2.1 million from £35.5 million to £37.6 million
reflecting the £3.6 million statutory profit after tax for the period for
continuing and discontinued operations, £0.5 million credit to long-term
incentive plan share-based payment charges offset by the £2.0 million total
dividend paid (£1.5 million in relation to FY2023 and £0.5 million interim
dividend in relation to FY2024 financial performance).
Non- current assets
Non-current assets reduction of £0.9 million reflects the £1.1 million
impairment of the TNM investment, £1.4 million reduction in deferred tax
asset, offset by £0.9 million deferred consideration recognised and
intangible assets increasing by £0.4 million net due to digital development
projects, the acquisition of Athletics Weekly, Serious About Rugby League and
The Business Magazine Group Limited net of amortisation charges.
At the year-end the Group has recognised a total deferred consideration asset
of £1.7 million (£0.8 million current, £0.9 million non-current). This
relates to the £3.5 million deferred consideration recognised at fair value
when PCS was sold to Naviga in March 2024, which was discounted to £2.2
million. From 1 July 2024 the Group will benefit from utilising the £3.5
million service credit, which will reduce its adjusted operating costs and
cash outflows over the next 4-5 years. The Group has utilised £0.4 million of
service credits in the second half, leaving a remaining deferred consideration
asset of £1.7 million at the period-end.
The net deferred tax asset has decreased by £1.3 million to £1.2 million.
The reduction primarily relates to £2.1 million tax losses utilised in the
period, offset by £0.3 million deferred tax asset recognised in relation to
deferred consideration. Gross brought forward losses of £9.6 million (2023:
£17.9 million) are recognised as a deferred tax asset at the period-end,
calculated using a corporate tax rate of 25%.
Current assets
Cash and cash equivalents of £10.9 million increased by £0.2 million in the
period. The Group had robust operating cash flows in the period with £5.8
million of cash generated from operating activities offset by £2.0 million
dividend paid to shareholders, £0.9 million spent on share and asset
acquisitions and £1.8 million invested in intangible asset development.
Trade and other receivables increase of £3.7 million includes £4.7 million
trade receivables outstanding at the year-end due from Mediaforce Group
(before credit loss allowances) (Note 12).
Current liabilities
Trade and other payables of £21.4 million (2023: £19.9 million) includes
£0.7 million relating to restructuring accruals for redundancies and £1.4
million corporate legal and advisory fees held in the Company Trade and other
payables.
Right of Use lease liabilities have reduced by £0.3 million across current
and non-current liabilities, with one new leased property addition in the
period offset by leases expiring.
Cash flow
Adjusted Statutory
FY 2024 FY 2024
£m £m
Operating profit for the period from Continuing Operations 10.7 4.2
Amortisation of intangible assets - 1.9
Impairment of The News Movement - 1.1
ROUA and tangible assets depreciation expense 0.5 0.9
Impairment of intangibles - 0.1
Restructuring costs paid (2.4) -
Charge for share based payment - 0.5
Net increase in provisions - (0.3)
Changes in working capital:
Increase in receivables (3.6) (3.7)
(Decrease))/Increase in payables (0.1) 1.1
Net operating cashflows from continuing activities 5.1 5.8
Net operating cashflows from discontinued activities (0.3) (0.3)
Net cash inflow from operating activities 4.8 5.5
Investing activities
Acquisition of subsidiaries (0.4) (0.4)
Investment in joint venture (0.1) (0.1)
Interest earned 0.4 0.4
Acquisition of intangible assets (2.4) (2.4)
Purchases of tangible assets (0.1) (0.1)
Net investing cashflows from discontinued activities - -
Net cash outflow from investing activities (2.6) (2.6)
Financing activities
Dividend paid (2.0) (2.0)
Interest element of lease rental payments - (0.1)
Principal repayment of leases - (0.6)
Net cash outflow from financing activities (2.0) (2.7)
Net increase in cash and cash equivalents from continuing operations 0.5 0.5
Net increase in cash and cash equivalents from discontinued operations (0.3) (0.3)
Cash and cash equivalents at the beginning of the period 10.7 10.7
Cash and cash equivalents at the end of the period 10.9 10.9
The conversion of adjusted operating profit of £10.7 million into cash is 69%
(£4.8 million comprising cash inflow from operating activities before
restructuring costs and after purchases of tangible assets).
As at 28 December 2024, the Group held £10.9 million (2023: £10.7 million)
of cash. This is after £0.9 million investment on share and asset
acquisitions (net of cash acquired) and dividends totalling £2.0 million paid
in the period (including £1.5 million final dividend for FY23 performance and
£0.5 million paid for the maiden interim dividend for FY24 performance).
Robust operating cash generation and low capital expenditure ensured the Group
maintains a substantial cash balance and retains financial flexibility.
Capital Expenditure
During the year, the Group incurred capital expenditure of £1.9 million
including £1.8 million on digital website and product development and £0.1
million on IT equipment, predominantly video equipment and laptops. For 2025,
capital expenditure is expected to be c£2.5 million with continued digital
investment and replacement of certain systems and IT equipment as it
approaches the end of its useful life. Beyond 2025, capital expenditure is
expected to be limited to c£1.5 million per annum.
IFRS 16 lease commitment payments were £0.6 million in 2024, with annual
payments expected to reduce down to c£0.3 million over the next two years as
the Group continues to rationalise its property portfolio by moving to more
flexible short term serviced accommodation.
Dividends
The Board is committed to provide strong returns to shareholders through a
combination of share price growth and income. To ensure the Group maintains
financial flexibility and an appropriate level of financial headroom for
investment and working capital, dividend payments will be aligned to the free
cash generation of the business. The free cash generation for the purposes of
assessing the dividend will be the net cash flow generated by the Group before
the repayment of debt, dividend payments and other capital returns to
shareholders.
The Board approved a maiden interim dividend payment of 0.2 pence per share to
shareholders on the register at 9 August 2024, which was paid on 20 September
2024.
As a consequence of the Acquisition, the Board is not at present proposing a
final dividend in respect of the 52 weeks ended 28 December 2024.
Current trading and outlook
As is usual in circumstances where a takeover offer is active, the Board have
elected not to give future performance outlook guidance. The Board
nevertheless maintains its guidance that the Company will meet its
expectations for the full year.
However, the agility and ingenuity of National World's staff has proved equal
to past challenges and the company believes that continuing efficiency
measures, including further automation, and focus on growing revenue streams
will deliver results for 2025.
National World continues to focus on the development of a sustainable
publishing business and we thank all our colleagues for their support as
the Group builds its activities and for providing their talent and creativity
at an individual level to optimise the collective effort despite the continued
economic and print media sector challenges.
Position of Company's Business
As at 28 December 2024 the Company's Statement of Financial Position shows net
assets totalling £31.4 million (2023: £30.3 million), including a cash
balance of £2.0 million (2023: £2.0 million) and intercompany receivables of
£20.7 million relating to National World Publishing Limited. The Company has
liabilities of £2.0 million trade and other payables of which £0.7 million
were settled in January and February 2024.
The Board Executives have a good history of running businesses that have been
compliant with all relevant laws and regulations and there have been no
instances of non-compliance in respect of environmental matters.
At the period-end, the Company has four Executive Directors and two
Non-Executive Directors (2023: four Executive Directors and three
Non-Executive Directors).
The Company endeavours to ensure that its employment practices consider the
necessary diversity requirements and compliance with all employment laws. The
Board has experience in dealing with such issues and sufficient training and
qualifications to ensure they meet such requirements.
The government of the United Kingdom has issued guidelines setting out
appropriate procedures for companies to follow to ensure that they are
compliant with the UK Bribery Act 2010. The Company has conducted a review
into its operational procedures to consider the impact of the UK Bribery Act
2010 and the Board has adopted an anti-corruption and anti-bribery policy.
Sheree Manning
Chief Financial Officer
21 March 2025
Consolidated Income Statement
For the 52 weeks ended 28 December 2024
52 weeks ended 52 weeks ended
28 December 2024
30 December 2023
Restated*
Note £m £m
Continuing operations
Revenue 3 96.0 88.0
Cost of sales (68.6) (63.7)
Gross profit 27.4 24.3
Operating expenses before non-recurring items (18.9) (16.3)
Non-recurring items: 4
Impairment of The News Movement investment (1.1) -
Impairment of digital intangible assets (0.1) -
Restructuring and redundancy (1.8) (3.6)
ROUA impairment - (0.1)
Incomplete acquisition costs - (1.2)
Legal and advisory fees (1.3) -
Acquisition transaction costs - (0.4)
Onerous property costs - (0.1)
Total operating expenses (23.2) (21.7)
Operating profit 4.2 2.6
Financing
Finance costs 6 (0.1) (0.2)
Interest income 5 0.4 0.7
Net finance income/(expense) 0.3 0.5
Profit before tax 4.5 3.1
Tax (expense)/credit 7 (1.7) (0.4)
Profit after tax from continuing operations 2.8 2.7
Profit after tax for the year from discontinued operations 7 0.8 -
Profit after tax for the period from total operations 3.6 2.7
Earnings per share from continuing operations 8
Basic 1.0p 1.0p
Diluted 1.0p 1.0p
Earnings per share from discontinued operations
Basic 0.3p -
Diluted 0.3p -
Earnings per share from continuing and discontinued operations
Basic 1.3p 1.0p
Diluted 1.3p 1.0p
*52 weeks ended 30 Dec 23 audited consolidated income statement has been
restated above due to classification of PCS revenue and costs as discontinued
operations, see Note 21.
Note 8 includes the calculation of adjusted earnings per share and Note 19
presents the reconciliation between the statutory and adjusted results.
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 28 December 2024
52 weeks ended 52 weeks ended
28 December 2024
30 December 2023
£m £m
Profit for the period from continued operations 2.8 2.7
Profit for the period from discontinued operations 0.8 -
Total other comprehensive profit for the period - -
Total comprehensive profit for the period 3.6 2.7
Consolidated Statement of Financial Position
For the 52 weeks ended 28 December 2024
As at As at
28 December
30 December
2024 2023
Note £m £m
Non-current assets
Goodwill 9 13.7 13.3
Intangible assets 10 12.0 11.6
Tangible assets 11 0.9 1.1
Investments 0.1 1.1
Right of use assets 13 0.7 0.8
Deferred consideration 21 0.9 -
Deferred tax 1.2 2.5
29.5 30.4
Current assets
Inventory 0.1 -
Trade and other receivables 12 19.0 15.3
Deferred consideration 21 0.8 -
Cash and cash equivalents 10.9 10.7
30.8 26.0
Assets classified as held for sale 22 - 1.0
Total assets 60.3 57.4
Current liabilities
Trade and other payables 12 (21.4) (19.9)
Lease liabilities 13 (0.3) (0.8)
Provisions 15 (0.6) (0.9)
(22.3) (21.6)
Non-current liabilities
Lease liabilities 13 (0.4) (0.2)
(0.4) (0.2)
Liabilities classified as held for sale 22 - (0.1)
Total liabilities (22.7) (21.9)
Net assets 37.6 35.5
Equity
Share capital 18 0.3 0.3
Share premium 18 27.4 27.4
Retained earnings 18 9.9 7.8
Total equity 37.6 35.5
Consolidated Statement of Changes in Equity
For the 52 weeks ended 28 December 2024
Share capital Share premium Retained earnings/ Total equity
(accumulated losses)
Note £m £m £m £m
As at 1 January 2023 0.3 24.6 9.1 34.0
Profit for the period - - 2.7 2.7
Total comprehensive profit for the period - - 2.7 2.7
Issue of new ordinary shares - 2.8 (2.8) -
Long-term incentive share based payments charge - - 0.2 0.2
Dividend paid to shareholders on 5 July 2023 - - (1.4) (1.4)
As at 30 December 2023 0.3 27.4 7.8 35.5
As at 31 December 2023 0.3 27.4 7.8 35.5
Profit for the period - - 3.6 3.6
Total comprehensive profit for the period - - 3.6 3.6
Long-term incentive share based payments charge - - 0.5 0.5
Dividend paid to shareholders on 10 July 2024 18 - - (1.5) (1.5)
Dividend paid to shareholders on 20 September 2024 18 - - (0.5) (0.5)
As at 28 December 2024 0.3 27.4 9.9 37.6
Consolidated Cash Flow Statement
For the 52 weeks ended 28 December 2024
52 weeks ended 52 weeks ended
28 December 2024
30 December 2023
Note £m £m
Cash flow from operating activities
Cash generated from continuing operations 17 5.8 4.2
Net operating cashflows from discontinued activities 17 (0.3) 0.2
Net cash inflow from operating activities 5.5 4.4
Investing activities
Acquisition of subsidiaries 16 (0.4) (16.5)
Cash acquired in subsidiaries - 1.4
Acquisition transaction costs 4 - (0.4)
Incomplete acquisition costs 4 - (0.5)
Interest earned 5 0.4 0.7
Acquisition of intangible assets 10 (2.4) (1.7)
Purchase of tangible assets 11 (0.1) (0.4)
Investment in Joint Venture (0.1) -
Net investing cashflows from continuing activities (2.6) (17.4)
Net investing cashflows from discontinued activities - 0.1
Net cash outflow from investing activities (2.6) (17.3)
Financing activities
Net Interest paid 6 - (0.1)
Capital repayments of lease payments 13 (0.6) (0.8)
Interest element of lease rental payments 6,13 (0.1) (0.1)
Dividend paid 18 (2.0) (1.4)
Debt repayment - (1.0)
Net financing cashflows from continuing activities (2.7) (3.4)
Net financing cashflows from discontinued activities - -
Net cash utilised from financing activities (2.7) (3.4)
Net increase/(decrease) in cash and cash equivalents from continuing 0.5
operations
(16.6)
Net (decrease)/increase in cash and cash equivalents from discontinued (0.3)
operations
0.3
Cash and cash equivalents at the beginning of the period 10.7 27.0
Cash and cash equivalents at the end of the period 10.9 10.7
Cash and cash equivalents - continuing operations 10.9 10.4
Cash and cash equivalents - discontinued operations - 0.3
Cash and cash equivalents at the end of the period 10.9 10.7
Notes to the Consolidated Financial Statements
For the 52 weeks ended 28 December 2024
1. General information
The financial information in the Annual Results Announcement, which comprises
the Consolidated income statement, the Consolidated statement of comprehensive
income, the Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity and the related notes ('Consolidated Financial
Information') in the Preliminary announcement is derived from but does not
represent the full statutory accounts of National World plc.
The statutory accounts for the 52 weeks ended 30 December 2023 have been filed
with Companies House and those for the 52 weeks ended 28 December 2024 will be
filed following the Annual General Meeting on 29 May 2025.
The auditors' reports on the statutory accounts for the 52 weeks ended 28
December 2024 and for the 52 weeks ended 30 December 2023 were unqualified, do
not include reference to any matters to which the auditors drew attention by
way of emphasis of matter without qualifying the reports and do not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006.
Whilst the financial information included in this Annual Results Announcement
has been prepared in accordance with the recognition and measurement criteria
of International Financial Reporting Standards (IFRS), this announcement does
not itself contain sufficient information to comply with IFRS. This Annual
Results Announcement constitutes a dissemination announcement in accordance
with Section 6.3 of the Disclosure and Transparency Rules (DTR). The Annual
Report for the 52 weeks ended 28 December 2024 will be available on the
Company's website at corporate.nationalworld.com.
National World plc ('the Company') is a public limited company listed on the
London Stock Exchange in England and Wales. The Company is domiciled in
England and its registered office is Suite E3 Joseph's Well, Hanover Walk,
Leeds, United Kingdom, LS3 1AB, United Kingdom. The principal activities of
the Group are to provide news and information services in the United Kingdom
through a portfolio of multimedia publications and websites.
The consolidated Financial Statements of the Company and its subsidiaries
(together referred to as the 'Group') for the 52 weeks ended 28 December 2024
were approved by the Directors on 21 March 2025.
2. Accounting policies
These consolidated financial statements have been prepared in accordance with
United Kingdom adopted international accounting standards and the applicable
legal requirements of the Companies Act 2006. The consolidated Financial
Statements were authorised for issue by the Board of Directors on 21 March
2025.
These Financial Statements are presented in British pounds, which is the
functional currency of all entities in the Group. All financial information
has been rounded to the nearest hundred thousand except when otherwise
indicated.
These Financial Statements have been prepared under the historical cost basis.
The consolidated financial statements have been prepared on a going concern
basis.
Going concern basis
The Directors have assessed the Group's prospects, both as a going concern and
its long-term viability, at the time of the approval of National World plc's
Annual Report for the 52 weeks ended 28 December 2024. The Directors consider
it appropriate to adopt the going concern basis of accounting in the
preparation of the Group's annual consolidated financial accounts. The
assessment was based on review of the three year projections for the business
which were considered by the Board when approving the budget for 2025.
Management believe that a longer term assessment is not appropriate given the
ongoing structural challenges facing print media and the changing landscape
for digital. Key considerations in the assessment were:
· decline in newspapers revenue;
· the ongoing impact of the macroeconomic conditions on revenue;
· management's ongoing mitigating actions in place to manage costs
and cash flow;
· capital expenditure requirements, including the ongoing
maintenance capital expenditure requirements; and
· investment in digital resource and development.
Sensitivity analysis was applied to the projections to determine the potential
impact should the principal risks and uncertainties occur, individually or in
combination. The Board also assessed the likely effectiveness of any proposed
mitigating actions.
Whilst the Group strategy is to grow through acquisition and organic
development, no acquisitions have been assumed in the projections as there is
no certainty that acquisitions will be concluded. Prior to proceeding with any
acquisition, the three-year projections will be updated to ensure there is no
adverse impact on the Group prospects or going concern resulting from an
acquisition.
The review concluded that the Group maintained significant financial
flexibility with cash of £10.9 million as at 28 December 2024 and the
Directors are satisfied that the Group will be able to operate with sufficient
financial flexibility and headroom for the foreseeable future, which comprises
the period of at least 12 months from the date of approval of the financial
statements.
The Directors have a reasonable expectation that the Company and the Group
will be able to continue in operation and meet its liabilities as they fall
due over the period of their assessment.
Changes in accounting policies and disclosures
The standards that became applicable for the year did not materially impact
the Group's accounting policies and did not require retrospective adjustments.
Alternative performance measures
The Company presents the results on a statutory and adjusted basis. The
Company believes that the adjusted basis will provide investors with useful
supplemental information about the financial performance of the Group, enable
comparison of financial results between periods where certain items may vary
independent of business performance and allow for greater transparency with
respect to key performance indicators used by management in operating the
Group and making decisions. Although management believes the adjusted basis is
important in evaluating the Group, they are not intended to be considered in
isolation or as a substitute for, or as superior to, financial information on
a statutory basis. The alternative performance measures are not recognised
measures under IFRS and do not have standardised meanings prescribed by IFRS
and may be different to those used by other companies, limiting the usefulness
for comparison purposes. Note 19 sets out the reconciliation between the
statutory and adjusted results. An adjusted cash flow and reconciliation to
statutory cash flow is presented in Note 20.
Business combinations
The acquisition of subsidiaries are accounted for using the acquisition
method. The cost of the acquisition is measured at the aggregate of the fair
values at the date of exchange of assets given, liabilities incurred or
assumed, and equity instruments issued by the Group in exchange for control of
the acquiree. Acquisition related costs are recognised in the Income Statement
as incurred.
The acquiree's identifiable assets, liabilities and contingent liabilities
that meet the conditions for recognition under IFRS 3, including publishing
titles, are recognised at their fair value at the acquisition date.
Non-current assets held for sale and discontinued operations
Non-current assets (and disposal Groups) classified as held for sale are
measured at the lower of carrying amount and fair value less costs of
disposal.
Assets and disposal Groups are classified as held for sale if their carrying
amount will be recovered through a sale transaction rather than through
continuing use. This condition is regarded as met only when the sale is highly
probable and the asset (or disposal Group) is available for immediate sale in
its present condition. Management must be committed to the sale which should
be expected to qualify for recognition as a completed sale within one year
from the date of classification.
When the Group is committed to a sale plan involving loss of control of a
subsidiary, all of the assets and liabilities of that subsidiary are
classified as held for sale when the criteria described above are met,
regardless of whether the Group will retain a non-controlling interest in its
former subsidiary after the sale.
Assets and liabilities classified as held for sale are presented separately as
current items in the statement of financial position.
Discontinued operations are excluded from the results of continuing operations
and presented as a single amount as profit or loss after tax from discontinued
operations in the statement of profit or loss.
Key sources of estimation uncertainty
Impairment of non-financial assets
The Group is required to test, whether non-financial assets (intangible,
goodwill and tangible assets) have suffered any impairment based on the
recoverable amount of its CGUs, when there are indicators for impairment.
Determining whether the CGU is impaired requires an estimation of the value in
use of the CGU to which these assets are allocated. Key sources of
estimation uncertainty in the value in use calculation include the estimation
of future cash flows of the CGU affected by expected changes in underlying
revenues and direct costs as well as corporate and central cost allocations
through the forecast period, the long-term growth rates and a suitable
discount rate to apply to the aforementioned cash flows in order to calculate
the net present value. The discount rate used for all CGU's was 18.1%,
(2023: 18.1%) using the Capital Asset Pricing Method ("CAPM") with a long-term
decline rate in perpetuity of 1.0%.
Valuation judgements
Acquisitions in the period
The Group acquired The Business Magazine Group Limited on 30 November 2024,
which has been treated as a business combination under IFRS 3, refer Note 16.
Provision for expected credit losses ("ECLs") of trade receivables
The Group measures the loss allowance for trade receivables at an amount equal
to lifetime expected credit loss ("ECL"). The ECL on trade receivables is
estimated using a provision matrix by reference to past default experience of
the debtor and analysis of the debtor's current financial position, adjusted
for factors that are specific to the debtors, including the risk or
probability that a credit loss occurs, general economic conditions of the
industry in which the debtors operate and an assessment of both the current as
well as the forecast direction of conditions at the reporting date. At every
reporting date, the historical observed default rates are updated and changes
in the forward-looking estimates are analysed. The information about the ECLs
on the Group's trade and receivable and contract assets is disclosed in Note
12.
3. Revenue
The analysis of the Group's contracted revenue from continuing operations is
as follows:
2023
2024 Restated*
£m £m
Continuing revenue
Print publishing 69.2 63.6
Digital publishing 19.6 18.4
Other 7.2 6.0
Total revenue 96.0 88.0
*52 weeks ended 30 Dec 23 audited revenues has been restated to reclassify
£0.4 million of PCS Other Revenue as discontinued operations, Note 21.
The description and revenue recognition criteria (timing and performance
obligations) for each revenue stream is contained within the accounting
policies, in Note 2.
4. Profit for the period
Profit for the period includes the following items:
2024 2023
Note £m £m
Operating profit for continuing operations is shown after
charging/(crediting):
Depreciation of tangible fixed assets 11 0.5 0.4
Amortisation of intangible assets 10 1.9 0.9
Depreciation of right of use assets 13 0.4 0.4
Staff costs 48.5 44.3
Cost of inventory recognised as expense 3.2 4.0
Non-recurring items - continuing operations:
Completed transaction costs a - 0.4
Incomplete acquisition costs b - 1.2
Restructuring and redundancy c 1.8 3.6
Property rationalisation d - 0.1
ROUA impairment d - 0.1
Legal and advisory fees e 1.3 -
Impairment of intangible assets f 0.1 -
Impairment of The News Movement investment g 1.1 -
Total non-recurring items - continuing operations 4.3 5.4
Non-recurring items - discontinued operations
Gain on sale - PCS h (1.0) -
Total non-recurring items - total operations 3.3 5.4
a) Acquisition transaction costs
No costs incurred in the period, due to lower level of M&A activity in
2024 (2023: £0.4 million).
b) Incomplete acquisition costs
No costs incurred in the period, due to lower level of M&A activity in
2024. In the prior year, £1.2 million of professional advisory fees were
incurred in relation to attempted acquisitions.
c) Restructuring costs
Restructuring costs of £1.8 million have been incurred in 2024 for the
delivery of annualised cost savings of £2.9 million (2023: £3.6 million
non-recurring cost for the delivery of annualised cost savings of £6.0
million).
d) Property rationalisation/ROUA impairment
There is no property rationalisation or associated impairment charge in FY24.
In the prior period the decision was made to vacate the Leeds and Mexborough
leased offices, resulting in an additional onerous property provision of £0.1
million and impairment of the ROU assets of £0.1 million.
e) Professional advisory fees
These include legal and advisory fees of £0.7 million incurred in relation to
the recommended offer for the Company by Neo Media Publishing Limited, (a
wholly owned subsidiary of Media Concierge Holdings Limited), shareholder
legal dispute costs of £0.3 million, and other advisory and legal fees of
£0.3 million.
f) Impairment of intangible assets
Write-down of Newschain digital intangible assets of £0.1 million (2023:
£nil).
g) The News Movement impairment
In the period the Directors have decided to impair The News Movement
investment value to £nil value leading to a £1.1 million impairment charge
(2023: £nil).
h) Gain on sale - PCS
On 31 March 2024 the Group disposed of Press Computer Systems Limited which it
had acquired 6 months earlier as part of the Midland News Association
acquisition. The Group will receive £3.5 million consideration for the
disposal, from Naviga, in the form of service credits which the Group will
utilise against technology services over the 5 year software agreement that it
has signed with Naviga.
In the period, the Group has recorded a £1.0 million net gain on sale (Note
21) comprising £3.5 million deferred consideration fair valued to £2.2
million offset by £0.2 million of professional fees and £1.0 million
write-down of PCS assets disposed.
5. Interest Income
2024 2023
£m £m
Interest income 0.4 0.7
Total interest income 0.4 0.7
Interest was earned on 32-day notice, and easy access, deposit accounts held
with Barclays and Lloyds banks.
6. Finance costs
2024 2023
Note £m £m
Interest on interest only unsecured loan notes - 0.1
Interest on lease liabilities 13 0.1 0.1
Total finance costs 0.1 0.2
7. Tax
Income tax expense is recognised based on management's estimate of the
weighted average effective annual income tax rate expected for the full
financial year. The tax rate applied for 2024 of 25% (2023: 23.5%) was the
standard rate of corporation tax, substantively enacted by parliament in May
2021. The increase in the corporate tax rate to 25% has been accounted for
in the calculation of the deferred tax.
The tax on profit comprises:
Note 2024 2023
£m £m
Continuing operations:
Current tax
Expense/(credit) for the period 0.2 -
Deferred tax
Expense/(credit) for the period 1.6 0.4
Prior year adjustment (0.2) -
Deferred tax - adjustment relating to publishing title acquisition 9 0.1 -
Total deferred tax expense for the period for continuing operations 1.5 0.4
Total tax expense for the period for continuing operations 1.7 0.4
Discontinued operations:
Current tax
Expense/(credit) for the period 0.6 -
Deferred tax
Expense/(credit) for the period (0.1) -
Prior year adjustment (0.1) -
Total deferred tax expense for the period for discontinued operations (0.2) -
Total tax expense for the period for discontinued operations 0.4 -
Total current tax expense - continuing and discontinued operations 0.8 -
Total deferred tax expense - continuing and discontinued operations 1.3 0.4
Total tax expense - continuing and discontinued operations 2.1 0.4
8. Earnings per share
Basic earnings per share is calculated by dividing profit for the period
attributable to equity holders of the parent by the weighted average number of
ordinary shares during the period and diluted earnings per share is calculated
by adjusting the weighted average number of ordinary shares in issue on the
assumption of conversion of all potentially dilutive ordinary shares.
2024 2023
M M
Weighted average number of ordinary shares for basic earnings per share 268 265
Effect of dilutive ordinary shares in respect of potential share awards under 4 4
the value creation plan*
Weighted average number of ordinary shares for diluted earnings per share 272 269
Pence Pence
Statutory earnings per share:
Continuing operations
Earnings per share - basic 1.0 1.0
Earnings per share - diluted 1.0 1.0
Discontinued operations
Earnings per share - basic 0.3 -
Earnings per share - diluted 0.3 -
Continuing and discontinued operations:
Earnings per share - basic 1.3 1.0
Earnings per share - diluted 1.3 1.0
Adjusted earnings per share:
Continuing operations
Earnings per share - basic 3.1 2.8
Earnings per share - diluted 3.1 2.8
Discontinued operations
Earnings per share - basic - -
Earnings per share - diluted - -
Continuing and discontinued operations:
Earnings per share - basic 3.1 2.8
Earnings per share - diluted 3.1 2.8
*12.7m new ordinary shares were issued on 3 May 2023 to satisfy the value
creation plan award, of which 4.3m share options remain unexercised at the
period end, Note 18.
9. Goodwill
Note 2024 2023
£m £m
Opening balance 13.3 5.2
Acquisition of subsidiaries 16 0.3 8.1
Deferred tax liability arising on acquisition of Athletics Weekly publishing 0.1 -
title
Carrying value at the end of the period 13.7 13.3
Opening goodwill relates to JPIMedia Publishing Limited and its subsidiaries
(JPIMedia Group) acquired in 2021.
Goodwill arising on the acquisition of subsidiaries relates to The Business
Magazine ("TBMG") Note 16.
10. Intangible assets
Publishing titles - Regional Digital intangible assets Brand Customer relationships
Total
Note £m £m £m £m £m
Opening balance 7.6 1.7 1.4 0.9 11.6
Additions - 1.8 - - 1.8
Acquisitions - asset purchase 16 0.2 0.3 - - 0.5
Acquisition - share purchase 16 - 0.1 - - 0.1
Amortisation charge for the period 4 (0.8) (0.9) (0.1) (0.1) (1.9)
Impairment 4 - (0.1) - - (0.1)
Carrying value at the end of the period 7.0 2.9
1.3 0.8 12.0
The opening balance includes JPIMedia Group intangible assets, consisting of
regional publishing titles and digital intangible assets acquired in January
2021 for £5.3 million, Scoopdragon and Newschain assets of £0.3 million,
Rotherham Advertiser £0.4 million, Insider Media brand and customer
relationship assets of £2.5 million and Midland News Association titles and
digital brand assets totalling £3.2 million, software and digital development
assets of £1.4 million net of accumulated amortisation.
Digital intangible asset additions in the period include the capitalisation of
software and external development costs which form part of the core platform
for the Group's Editorial and Sales functions.
Acquisitions in the period comprise:
· Athletics Weekly and Serious About Rugby acquired as asset
purchases totalling £0.5 million (Note 16).
· The Business Magazine Group Limited intangible assets acquired
via share purchase totalling £0.1 million (Note 16).
The impairment charge in the period relates to Newschain assets.
Intangible assets are amortised over their useful economic life and the
carrying value of the titles is reviewed when there are indicators that an
impairment has occurred.
Impairment assessment
The Group has identified four identifiable CGUs being the regional publishing
business, Midland News Association Limited, Insider Media Limited and The
Business Magazine Group Limited. The CGUs include intangible assets, digital
intangible assets, goodwill, property, plant and equipment. Within each CGU
there is an interdependency of revenue and costs within a matrix management
structure, single wholesale and distribution agreements, substantial packaged
advertising sales across all titles and websites and dependence on central
support infrastructure.
The impairment review in respect of the CGUs concluded that no impairment
charge was required.
The Group tests the carrying value of the CGUs held within the Group for
impairment annually or more frequently if there are indications that the
carrying value is less than the recoverable amount. If an impairment charge is
required, this is allocated first to reduce the carrying amount of any
goodwill allocated to the CGU and then to the other assets of the CGU but
subject to not reducing any asset below its recoverable amount.
The value in use calculation at 28 December 2024 was prepared using consistent
methodologies to that applied in prior periods. With regard to the
methodologies applied in the valuation, the intangible assets of the Group
were assessed using an income approach based method. The income approach is
suitable for assets which generate the majority of their value from their
income-generating capacity. It operates under the premise that the value of
that asset can be accurately derived from the value of the future net cash
flows which will be generated by it over time, discounted back to their
present value at an appropriate discount rate.
The Directors consider that the publishing titles, with a carrying value as at
28 December 2024, have finite lives of up to 10 years.
The recoverable amounts of the CGUs are determined from value in use
calculations. The key assumptions for the value in use calculations are:
· expected changes in underlying revenues and direct costs during
the period;
· growth / decline rates; and
· discount rate.
The key assumptions underpinning the Value in Use model are:
2024 2023
Discount rate (pre-tax WACC) 18% 18%
Long-term decline rate 1% 1%
The Group prepares discounted cash flow forecasts using:
· the Board-approved budget for 2025, and projections to 2027 which
reflects management's current experience and future expectations of the
markets in which the CGU operates and is based on information known at the
balance sheet date. This is then forecast into perpetuity beyond 2027. Changes
in underlying revenue and direct costs are based on past practices and
expectations of future changes in the market by reference to the Group's own
experience and, where appropriate, publicly available market estimates. These
include changes in demand for newspapers, cover prices, digital subscriptions,
print and digital advertising rates as well as movements in newsprint and
production costs and inflation;
· capital expenditure cash flows to reflect the cycle of capital
expenditure;
· net cash inflows for future years are extrapolated beyond 2027
based on the Board's view of the estimated annual long-term performance. A
long-term decline rate of 1% (2023: 1% decline) reflecting the market's view
of the long-term decline of the newspaper industry; and
· management estimates of discount rates that reflect current
market assessments of the time value of money, the risks specific to the CGUs
and the risks that the regional media industry is facing.
The discount rate reflects the weighted average cost of capital of the Group.
The current post-tax and equivalent pre-tax discount rate used is 13.5% and
18.1% respectively (2023: post-tax WACC 13.5% and pre-tax WACC 18.1%).
The impairment review is highly sensitive to reasonably possible changes in
key assumptions used in the value in use calculations. The headroom in the
impairment review is £38.3 million (2023: £21.9 million). A combination of
reasonably possible changes in key assumptions, such as digital growth being
slower than forecast or the decline in print revenue being greater, could lead
to an impairment. The sensitivity change for each CGU, based on the existing
modelling is as follows:
Cash generating unit
Sensitivity change Regional Publishing Insider Media Midland News TBMG
Impairment review headroom (value in use in excess of carrying value of £24.5m £3.4m £9.9m £0.4m
assets)
Increase in the long-term decline rate of 1% (which has the effect of Headroom is reduced by £2.0m to £22.5m. No impairment is triggered. Headroom is reduced by £0.2m. No impairment is triggered. Headroom is reduced by £0.7m. No impairment is triggered. Headroom is reduced by £20k. No impairment is triggered.
increasing the decline from 1% to 2% beyond 2027)
Increase in the long-term decline rate by 2% (which has the effect of Headroom is reduced by £3.8m. No impairment is triggered. Headroom is reduced by £0.5m. No impairment is triggered. Headroom is reduced by £1.3m. No impairment is triggered. Headroom is reduced by £39k. No impairment is triggered.
increasing the decline from 1% to 3% beyond 2027) by 2% (which has the effect
of increasing the decline from 1% to 3% beyond 2027)
Revenues are reduced by 5% with partial mitigation by DSC reduction Headroom is reduced by £18.9m. No impairment is triggered. Headroom is reduced by £1.4m. No impairment is triggered. Headroom is reduced by £1.5m. No impairment is triggered. Headroom is reduced by £0.3m. No impairment is triggered.
11. Tangible assets
Office Equipment
Note £m
Cost
At 31 December 2022 1.7
Acquisitions 0.5
Additions 0.4
Transfer to assets classified as held for sale (0.3)
Disposals (0.1)
Balance at 30 December 2023 2.2
Acquisitions 16 -
Additions 0.3
Disposals (0.6)
At 28 December 2024 1.9
Accumulated impairment losses and depreciation
Balance at 31 December 2022 (0.8)
Depreciation for the period (0.4)
Disposals 0.1
Balance at 30 December 2023 (1.1)
Depreciation for the period 4 (0.5)
Disposals 0.6
At 28 December 2024 (1.0)
Carrying value at 28 December 2024 0.9
Carrying Value at 30 December 2023 1.1
The assets are depreciated over their useful lives.
12. Other financial assets and liabilities
Trade and other receivables
2024 2023
£m £m
Trade receivables 13.1 9.9
Allowance for doubtful debts (0.6) (0.5)
Trade receivable after allowance for doubtful debts 12.5 9.4
Prepayments 2.2 2.3
Other debtors and contract assets 4.3 3.6
Total trade and other receivables 19.0 15.3
Net trade receivables
Trade receivables net of credit loss allowance are £12.5 million (2023: £9.4
million). The average credit period taken on sales is 43 days (2023: 37 days).
No interest is charged on the receivables. The Group measures the loss
allowance for trade receivables at an amount equal to lifetime expected credit
loss ("ECL"). The ECL on trade receivables is estimated using a provision
matrix by reference to past default experience of the debtor and analysis of
the debtor's current financial position, adjusted for factors that are
specific to the debtors, general economic conditions of the industry in which
the debtors operate and an assessment of both the current as well as the
forecast direction of conditions at the reporting date.
Before accepting any new credit customer, the Group obtains a credit check
from an external agency to assess the potential customer's credit quality and
then defines credit terms and limits on a by-customer basis. These credit
terms are reviewed regularly. In the case of one-off customers or low value
purchases, pre-payment for the goods is required under the Group's policy. The
Group reviews trade receivables past their due date but not impaired on a
regular basis and considers, based on past experience that the credit quality
of these amounts at the period end date has not deteriorated since the
transaction was entered into and so considers the amounts recoverable.
In determining the recoverability of a trade receivable, the Group considers
any change in the credit quality of the trade receivable from the date credit
was initially granted up to the balance sheet date. The concentration of
credit risk is limited due to the customer base being large and unrelated,
except for the Media Concierge companies who are related parties. Media
Concierge has withheld payment from the Group since September 2024 ahead of
issuing its possible offer in November 2024 and final cash offer in December
2024. On 6 December 2024, the Company announced in its RNS (0535P) that it had
agreed to a temporary halt in legal proceedings relating to the Investigation
(as described in the Company's announcement of 22 November 2024) whilst
discussions were ongoing regarding the Final Improved Proposal.
At the period-end trade receivables include balances of £4.7 million (2023:
£2.5 million) owed by Media Concierge companies (£4.3 million net of credit
loss allowance). The Directors remain confident that the outstanding amounts
will be settled. Accordingly, the Directors believe that there is no further
credit provision required in excess of the allowance for doubtful debts. On
the closing of the Acquisition, the receivables currently due from the
Mediaforce Group will become an internal intercompany balance and the new
directors of National World plc will need to determine of these receivables
then become intercompany loans or whether they remain as current assets of
National World plc. If the Acquisition does not complete, it is possible that
the legal dispute in relation to those debts will recommence.
Movement in the allowance for doubtful debts
2024 2023
£m £m
Balance at the beginning of the period 0.5 0.4
Acquisitions - 0.1
Transfer from credit note provision 0.2 -
Utilised (0.1) -
Balance at the end of the period 0.6 0.5
Ageing of impaired receivables
2024 2023
£m £m
Current - 0.2
<30 days - 0.1
60 - 90 days 0.2 0.1
90 -150 days 0.2 -
150+ days 0.2 0.1
0.6 0.5
Ageing of Trade receivables after allowance for doubtful debts
2024 2023
£m £m
Current 5.7 6.4
<30 days 1.6 2.0
30 - 60 days 0.7 0.9
60 - 90 days 1.4 0.1
90-150 days 2.2 -
150 days+ 0.9 -
12.5 9.4
The increased aged debtors balance is attributed to Media Concierge which has
withheld payment to the Group since September 2024 ahead of issuing its
possible offer in November 2024 and final cash offer in December 2024.
Cash and cash equivalents
2024 2023
£m £m
Cash and cash equivalents 10.9 10.7
Total cash and cash equivalents 10.9 10.7
Trade and other payables
2024 2023
£m £m
Trade creditors 3.8 4.5
Accruals 8.9 8.1
VAT 1.1 1.0
Social security and PAYE 1.4 1.4
Contract liabilities 2.6 2.6
Other creditors 2.8 2.3
Corporation tax 0.8 -
Total trade and other payables 21.4 19.9
Trade creditors and accruals principally comprise amounts outstanding for
trade purchases and ongoing costs.
13. Leases
The Group leases office buildings and motor vehicles for use in its business
operations. Leases of offices generally have terms between 2 and 10 years,
with longer period leases having a break clause after year 5. Motor vehicles
generally have a term of 4 years and are principally utilised by the sales,
editorial and IT departments. With the exception of short term leases and
leases of low value underlying assets, each lease is reflected on the balance
sheet as a right of use asset and a corresponding lease liability.
Carrying value of right of use assets
The carrying amounts of right of use assets recognised and the movement during
the period are set out below:
Property Motor Vehicles Total
Note £m £m £m
Carrying amount at 30 December 2023 0.2 0.6 0.8
Additions 0.3 - 0.3
Depreciation charge for the period 4 (0.2) (0.2) (0.4)
Carrying amount at 28 December 2024 0.3 0.4 0.7
Carrying value of lease liabilities
The carrying amounts of lease liabilities and the movements during the period
are set out below:
Property Motor Vehicles Total
Note £m £m £m
Carrying amount at 30 December 2023 0.3 0.7 1.0
Additions 0.3 - 0.3
Disposals - (0.1) (0.1)
Interest charge 6 0.1 - 0.1
Lease payments (0.4) (0.2) (0.6)
Carrying amount at 28 December 2024 0.3 0.4 0.7
Amounts recognised in Income statement
The following amounts are recognised in the income statement for the period:
2024 2023
Note £m £m
Depreciation of right of use assets 4 0.4 0.4
Interest expense 6 0.1 0.1
Total 0.5 0.5
In addition to the above, the Group occupies serviced office accommodation and
other short-term rental arrangements that do not meet the criteria for
reporting under IFRS 16, with a total cost of £1.0 million (2023: £0.9
million) incurred in the period.
The Group has elected not to recognise a lease liability for short term leases
(leases with an expected term of 12 months or less) or for leases of low value
assets (less than £4,000). Payments made under such leases are expensed on
a straight-line basis. In addition, certain variable lease payments are not
recognised as lease liabilities and are expensed as incurred.
14. Retirement benefit obligation
The Group contributes to three defined contribution schemes: the National
World Publishing Limited Retirement Savings Plan, a defined contribution
master trust; The Scotsman Stakeholder Pension Plan; and since April 2023 the
Newsco Insider Ltd Scheme, a Group Personal Pension Plan. Both the Master
Trust and the Stakeholder plans are administered by Scottish Widows, the Group
Personal Pension is administered by Royal London.
In the period employer contributions for the Scottish Widows schemes range
from 3% of qualifying earnings for employees statutorily enrolled, through to
8% of basic salary for the majority of members on salary up to £125,000.
Certain senior managers have company contributions up to 15% as these were
contracted ahead of the rules for all new members being agreed at a maximum of
8%. Contributions for the Royal London Scheme range from 4% to 10% of basic
salary.
The amount due to be paid at the period end is £0.32 million (2023: £0.3
million), with £0.31 million paid to Scottish Widows on 20 January 2025, and
£0.02 million paid to Royal London on 16 January 2025.
Since 1 April 2022, the Executive Directors receive a cash allowance in lieu
of pension contribution of 8% of base salary, capped at £125,000 salary, to
align their pension benefit to the wider workforce.
15. Provisions
Property rationalisation Dilapidations Total
£m £m £m
At 30 December 2023 0.2 0.7 0.9
Charged in 2024 - 0.1 0.1
Utilised in 2024 (0.2) (0.2) (0.4)
At 28 December 2024 - 0.6 0.6
Current provision - 0.6 0.6
Non-current provision - - -
Total provision - 0.6 0.6
Property rationalisation
The leases on the Leeds, Preston and Mexborough offices ended in 2024 so no
further provision is held. In 2023, the remaining space at Leeds, Preston and
Mexborough offices was vacated, and an onerous provision in relation to these
sites was expensed to non-recurring costs until the end of the lease terms
(Note 4).
Leasehold property dilapidations provision
The provision for leasehold dilapidations relates to the contractual
obligations to reinstate leasehold properties to their original state at the
lease expiry date. The Group has assessed the entire portfolio and made
provisions depending on the state of the property and the duration of the
lease and likely rectification requirements.
16. Business combinations
On 29 November 2024, the Group acquired 100% of the issued share capital of
The Business Magazine Group Limited which operates 12 market-leading business
to business events serving the business community in the South of England.
Country of Fair value of net assets at Acquisition Nature of business Acquiring entity
incorporation acquisition date date
and operation £m
The Business Magazine Group Limited England 0.3 30 November 2024 Other publishing activities Newsco Insider Limited
The acquisition represents a growth opportunity for National World and Insider
Media, with synergies arising from events and magazine publishing
collaboration.
The acquisition meets the definition of a business combination and has been
accounted for using the acquisition accounting method in accordance with the
Group's accounting policies. The provisional fair value of the assets and
liabilities recognised is as follows:
Note The Business Magazine Group Limited
Total
acquisition
£m £m
Working capital - -
Tangible assets 11 - -
Intangible assets 10 0.1 0.1
Fair value of assets and liabilities acquired - provisional - -
Goodwill 9 0.3 0.3
Total initial consideration paid in the period 0.4 0.4
Consideration refunded representing cash left in the business and normalised (0.1) (0.1)
level of working capital
Total final consideration 0.3 0.3
On completion, total cash consideration of £350k was paid (£318k net of cash
acquired) with £30k refunded in January 2025 representing cash left in the
business and normalised level of working capital. The final consideration
paid is £320k (£302k net of cash acquired).
Other acquisitions completed during the period
The Group completed two asset purchase acquisitions during the period which do
not meet the criteria of business combinations. The Group acquired Serious
About Rugby and Athletics Weekly for combined cash consideration of £0.5
million (Note 10), with the assets disclosed as acquired digital intangible
asset and publishing titles, respectively, in the period.
Total cash consideration paid for all three acquisitions (share and asset
purchases) completed in the period totalled £0.9 million, (net of cash
acquired from the TBMG acquisition).
Value acquisition related costs
Total legal and advisory costs incurred in respect of the share and assets
purchase acquisitions completed in the period was immaterial for 2024, refer
Note 4.
17. Notes to the Cash Flow Statement
2024 2023
Note £m £m
Operating profit - continuing operations 4.2 2.6
Adjustments for non-cash/non-operating items:
Amortisation of intangible assets 4 1.9 0.9
Tangible assets depreciation expense 4 0.5 0.4
ROUA depreciation expense 4 0.4 0.4
ROUA Impairment 4 - 0.1
Charge for share based payment 0.5 0.2
Impairment of The News Movement 4 1.1 -
Impairment of Newschain intangible asset 0.1 -
Operating cash flow before working capital changes 8.7 4.6
Net decrease in provisions (0.3) (0.2)
8.4 4.4
Intercompany loan from discontinued operations 0.2 -
Changes in working capital:
Increase/(decrease) in receivables (3.7) (0.7)
Increase in payables 0.9 0.5
Cash generated from continuing operations 5.8 4.2
Operating profit - discontinued operations 1.1 -
Amortisation of intangibles - 0.1
Write down of assets held for sale 4, 22 1.0 -
Operating cash flow before working capital changes 2.1 0.1
Deferred consideration receivable 21 (1.7) -
Intercompany loan to continuing group (0.2) -
Changes in working capital:
Increase/(decrease) in receivables (0.3) -
Increase in payables (0.2) 0.1
Cash generated from discontinued operations (0.3) 0.2
Cash and cash equivalents (which are presented as a single class of assets on
the face of the Statement of Financial Position) comprise cash at bank.
Changes in liabilities arising from financing activities
Note 13 details changes in the Group's liabilities arising from financing
activities, including both cash and non-cash changes. Liabilities arising
from financing activities are those for which cash flows are, or future cash
flows will be, classified in the Group's Consolidated Cash Flow Statement as
cash flows from financial activities.
18. Share capital and reserves
As at As at
28 December
30 December
2024 2023
£m £m
Share capital 0.3 0.3
Share premium 27.4 27.4
Retained earnings 9.9 7.8
Total equity 37.6 35.5
On 3 May 2023, a block listing for 12,663,363 new Ordinary Shares was
completed to satisfy the allotment of shares pursuant to the Company's 2019
Value Creation Plan ("VCP"), which is further described below. The new
Ordinary shares issued rank pari passu with the Company's existing issued
ordinary shares.
In 2023 8,231,186 of new Ordinary share options were exercised, and are
included in the share capital at the period end. At 28 December 2024, the
remaining 4,432,177 of new Ordinary share options remain unexercised however
are entitled to dividend equivalents, in accordance with the rules of the VCP.
All 267,663,987 shares in issue rank equally for voting purposes, on any
dividend declared and distributions made on winding up of the Company (2023:
267,663,987).
On 10 July 2024, the 0.55 pence per share dividend, in relation to FY23
performance, was paid to shareholders at a total cost of £1.5 million.
A maiden interim dividend of 0.2 pence per share was approved, declared by the
Board and paid on 20 September 2024 to shareholders on the register at 9
August 2024.
At 28 December 2024, all the Company's accumulated profits are distributable,
however, the available amount may be different at the point any future
distributions are made.
As a consequence of the Acquisition, the Board is not at present proposing a
final dividend in respect of the 52 weeks ended 28 December 2024.
19. Alternative performance measures
To provide clarity of the underlying trading performance of the Group, the
operating results are presented on an adjusted basis. Adjusted results are
before non-recurring restructuring and organisational charges, IFRS 16
adoption, transaction costs, amortisation of intangible assets and impairment
charges. The Directors believe that it is appropriate to additionally present
the alternative performance measures used by management in running the
business, and that it will present a more meaningful and comparable financial
result.
The adjusted results provide supplementary analysis of the 'underlying'
trading of the Group.
Adjusted results Statutory results
2024 2023 2024 2023
Restated* Restated*
£m £m £m £m
Revenue 96.0 88.0 96.0 88.0
Operating costs (84.8) (78.6) (84.7) (78.3)
Depreciation and amortisation (0.5) (0.4) (2.8) (1.7)
Operating profit pre non-recurring items 10.7 9.0 8.5 8.0
Non-recurring items - - (4.3) (5.4)
Operating profit 10.7 9.0 4.2 2.6
Net finance income/(expense) 0.4 0.6 0.3 0.5
Profit before tax 11.1 9.6 4.5 3.1
Tax (charge)/credit (2.6) (2.2) (1.7) (0.4)
Profit after tax for continuing operations 8.5 7.4 2.8 2.7
*52 weeks ended 30 Dec 23 audited consolidated income statement has been
restated above due to classification of PCS revenue and costs as discontinued
operations, see Note 21
The adjusted profit before tax for continuing operations is £11.1 million,
and the adjusted tax rate is 24% with a £2.6 million tax charge in the
period. The adjusted tax charge does not benefit from the brought forward tax
losses so as to provide a more meaningful and comparable financial result.
Operating profit as determined under IFRS to adjusted operating profit:
Note 2024 2023
Restated*
£m £m
Operating profit as determined under IFRS 4.2 2.6
Adjustments:
Lease costs (0.4) (0.3)
Deferred benefit received - Naviga service credits 21 0.3 -
Depreciation on right of use assets 4 0.4 0.4
Amortisation of intangible assets 4 1.9 0.9
Restructuring costs 4 1.8 3.6
Impairment of The News Movement 4 1.1 -
Impairment of Newschain 4 0.1 -
Legal and advisory fees 4 1.3 -
ROUA Impairment 4 - 0.1
Property Rationalisation 4 - 0.1
Acquisition transaction costs 4 - 0.4
Incomplete acquisition costs 4 - 1.2
Adjusted operating profit from continuing operations 10.7 9.0
Adjusted operating profit from discontinued operations 21 - 0.1
Adjusted operating profit - continuing and discontinued operations 10.7 9.1
*52 weeks ended 30 Dec 23 audited consolidated income statement has been
restated above due to classification of PCS revenue and costs as discontinued
operations, see Note 21.
EBITDA and adjusted EBITDA are:
2024 2023
Restated*
£m £m
Operating Profit as determined under IFRS from continuing operations 4.2 2.6
Depreciation and amortisation 4 2.8 1.7
Impairment of intangibles 0.1 -
ROUA Impairment 4 - 0.1
EBITDA from continuing operations 7.1 4.4
EBITDA from discontinued operations 0.1 0.1
Total EBITDA 7.2 4.5
Adjusted operating profit 10.7 9.0
Depreciation on tangible assets 11 0.5 0.4
Adjusted EBITDA from continuing operations 11.2 9.4
Adjusted EBITDA from discontinued operations - 0.1
Total EBITDA 11.2 9.5
*52 weeks ended 30 Dec 23 audited consolidated income statement has been
restated above due to classification of PCS revenue and costs as discontinued
operations, see Note 21.
20. Reconciliation of statutory to adjusted cash flow
IFRS Adjustments Adjusted
2024 2024
£m £m £m
Cash flow from operating activities
Operating profit from continuing operations 4.2 6.5 10.7
Depreciation and amortisation 2.8 (2.3) 0.5
Impairment of digital intangible assets 0.1 (0.1) -
Adjusted EBITDA 7.1 4.1 11.2
Restructuring costs paid - (2.4) (2.4)
Provisions (0.3) 0.3 -
Impairment of The News Movement 1.1 (1.1) -
Charge for share based payment 0.5 (0.5) -
Working capital and other (2.6) (1.1) (3.7)
Net operating cashflows from continuing activities 5.8 (0.7) 5.1
Investing activities
Acquisition of subsidiaries net of cash (0.4) - (0.4)
Interest earned 0.4 - 0.4
Purchases of tangible assets (0.1) - (0.1)
Acquisition of intangible assets (2.4) - (2.4)
Investment in Joint Venture (0.1) - (0.1)
Net cashflow from investing activities (2.6) - (2.6)
Financing activities
Interest paid (0.1) 0.1 -
Dividend payment (2.0) - (2.0)
Principal repayment of leases (0.6) 0.6 -
Net cashflow from financing activities (2.7) 0.7 (2.0)
Net increase in cash and cash equivalents from continuing activities 0.5 - 0.5
The adjustments for 2024 are:
· £6.5 million increase in operating profit reflects £0.3 million
benefit of deferred consideration service credits utilised (Note 21), £0.4
million depreciation of IFRS 16 leased assets, £1.9 million amortisation of
intangible assets, £1.8 million restructuring costs, £1.1 million impairment
of The News Movement investment, £0.1 million impairment of digital
intangible assets, £1.3 million of exceptional legal and advisory fees,
partially offset by savings of lease cost of £0.4 million resulting from the
adoption of IFRS 16;
· £2.2 million reduction in depreciation and amortisation reflects
the £0.4 million depreciation of IFRS 16 lease assets; and £1.8 million
amortisation of intangible assets which has been added back to operating
profit;
· £0.1 million impairment of digital intangible assets added back
to operating profit.
· £1.8 million reduction for restructuring costs, reflects £1.8
million charged in the period of which £1.1 million has been paid and £0.7
million is accrued at the period-end. The total redundancy costs paid in
2024 totals £2.4 million, the remaining £1.3 million paid in the period
related to 2023, and was accrued at the prior year-end;
· £0.3 million provision movement;
· £0.5 million charge for share based payment are added back as
they have already been charged to operating profit;
· £1.8 million negative working capital adjustment; and
· £0.1 million interest and £0.6 million principal payments on
IFRS 16 leases are added back as they have already been charged to operating
profit.
The prior year comparative statutory to adjusted cash flow reconciliation is
presented below:
IFRS Adjustments Adjusted
Restated Restated
2023 2023
£m £m £m
Cash flow from continuing operating activities
Operating profit 2.6 6.4 9.0
Impairment on ROUA 0.1 (0.1) -
Depreciation and amortisation 1.7 (1.3) 0.4
Charge for share based payment 0.2 (0.2) -
Adjusted EBITDA 4.6 4.8 9.4
Restructuring costs paid - (3.6) (3.6)
Provisions (0.2) 0.2 -
Working capital and other (0.2) (3.1) (3.3)
Net cash flow generated from continuing activities 4.2 (1.7) 2.5
Net cash flow generated from discontinued activities 0.2 (0.1) 0.1
Net cash flow generated from operating activities 4.4 (1.8) 2.6
Investing activities
Acquisition of subsidiaries net of cash (15.1) - (15.1)
Transactions cost complete and incomplete (0.9) 0.9 -
Interest earned 0.7 - 0.7
Purchases of tangible assets (0.4) - (0.4)
Acquisition of intangible assets (1.7) - (1.7)
Net investing outflow from continued activities (17.4) 0.9 (16.5)
Net investing cashflows from discontinued activities 0.1 - 0.1
Net cashflow from investing activities (17.3) 0.9 (16.4)
Financing activities
Interest paid (0.2) 0.1 (0.1)
Dividend payment (1.4) - (1.4)
Debt repayment (1.0) - (1.0)
Principal repayment of leases (0.8) 0.8 -
Net financing cashflow from continued activities (3.4) 0.9 (2.5)
Net financing cashflow from discontinued activities - - -
Net cashflow from financing activities (3.4) 0.9 (2.5)
Net increase in cash and cash equivalents - continuing operations (16.6) 0.1 (16.5)
Net increase in cash and cash equivalents - discontinued operations 0.3 (0.1) 0.2
Net increase in cash and cash equivalents (16.3) - (16.3)
The adjustments for 2023 are:
· £6.5 million increase in operating profit reflects £0.1 million
impairment of ROUA, £0.4 million depreciation of IFRS 16 leased assets, £0.9
million amortisation of intangible assets, £1.5 million of complete and
incomplete acquisition transaction costs, and £3.6 million restructuring
costs partially offset by savings of lease cost of £0.3 million resulting
from the adoption of IFRS 16;
· £0.1 million reduction in ROUA impairment of IFRS 16 lease
assets;
· £1.3 million reduction in depreciation and amortisation reflects
the £0.4 million depreciation of IFRS 16 lease assets; and £0.9 million
amortisation of intangible assets which has been added back to operating
profit;
· £0.2 million charge for share based payment which has been added
back to operating profit;
· £3.6 million reduction for restructuring costs, reflects £3.6
million charged in the period of which £2.3 million has been paid and £1.3
million is accrued at the period-end. The remaining £1.3 million paid in
the period related to 2022, and was accrued at the prior year-end;
· £0.2 million provision movement;
· £2.4 million negative working capital adjustment;
· £0.9 million total transaction cost for completed and incomplete
acquisitions; and
· £0.1 million interest and £0.8 million principal payments on
IFRS 16 leases are added back as they have already been charged to operating
profit.
21. Press Computer Systems Disposal
On 31 March 2024 the Group announced and completed the disposal of the Press
Computer Systems ("PCS") business, intangible and tangible assets to Naviga 1
UK Limited, a wholly-owned subsidiary of Naviga Inc.
The £3.5 million consideration for the disposal, to Naviga, is received in
the form of service credits which the Group will utilise against the 5 year
software agreement that it has signed with Naviga. The £3.5 million
deferred consideration has been recognised at fair value and discounted to
£2.2 million on completion.
A net profit on disposal of £1.0 million is reported in the period, within
discontinued operations, comprising £2.2 million deferred consideration,
offset by £0.2 million of transaction costs and a £1.0 million write-down of
PCS assets disposed (Note 4).
At the period-end, the Group reports a deferred consideration benefit
totalling £1.7 million (£0.8 million recognised as current and £0.9 million
non-current assets), having benefited from £0.3 million service credits
utilised in the second half (Note 19).
In accordance with IFRS 5 'Non-Current Assets Held for Sale and Discontinued
Operations', the results and cash flows of this 'disposal group' are reported
separately from the performance of continuing operations at each reporting
date and reported comparatives for FY2023 have been restated.
The FY2024 results and FY2023 comparatives have been adjusted to report PCS
results within discontinued operations, with the 2023 reclassification
including:
· £0.4 million Other Revenue (Note 4),
· £0.4 million of Cost of Sales including £0.3 million labour
costs, and £0.1 million intangible asset depreciation (Note 4)
· Statutory operating profit pre-non-recurring items impact of
£0.1 million
· Adjusted operating profit pre-non-recurring items impact of £0.1
million (Note 19)
As part of the disposal, a transitional services agreement (TSA) was agreed
between the Group and Naviga. The TSA includes services such as information
technology for varying periods of time. Since the disposal, the Group has
recognised net costs of £0.3 million under the TSA.
Profit on disposal of discontinued operations
Note 52 weeks to 28
December 2024
£m
Intangible assets 0.7
Tangible assets 0.3
Net assets disposed 22 1.0
Add: Disposal costs 0.2
Carrying value of disposed operations 1.2
Consideration satisfied by cash -
Consideration satisfied by service credits (discounted) 2.2
Profit on disposal of PCS 4 1.0
Disposal proceeds and investing activities of discontinued operations
Note 52 weeks to 28 December 2024
£m
Cash consideration -
Disposal costs 4 (0.2)
Net cash consideration (0.2)
Consideration satisfied by service credits (discounted) 4 2.2
Consideration satisfied by service credits(1) 1.3
Net consideration 3.3
(1)The discount on the fair value of consideration will be unwound over the
term of the 5 year Naviga contract.
22. Assets and liabilities classified as held for sale
2024 2023
£m £m
Non-current assets classified as held for sale - 1.0
Liabilities classified as held for sale - (0.1)
Total net assets classified as held for sale - 0.9
The assets and liabilities of PCS were classified as held for sale at the 52
weeks ended 30 December 2023. As disclosed in Note 21, the Group sold the PCS
business, intangible and tangible assets to Naviga on 31 March 2024.Principal
Risks and Uncertainties
The Company operates in an uncertain environment and is subject to a number of
principal risks. The principal risks in 2024 and 2023 are summarised in the
table below:
2023 2024 Update
Strategy Strategy Retained with a broader coverage of risks
Cyber security and data migration Cyber security and data migration Retained as a key risk
Infrastructure and operations Infrastructure and operations Retained as a key risk
Data Protection Data Protection Retained as a key risk
People People Retained as a key risk
Digital Audience & Referral Channels New key risk added for 2024
In 2024, we identified a new risk on our risk register the use of drones, we
are currently working on a policy to cover the use of drones in our business
and have insurance in place for the usage of drones. This risk is not
considered a principal risk.
The Board has undertaken a detailed risk assessment and considers the
following principal risks to the Company's activities although it should be
noted that this list is not exhaustive and that other risk factors not
presently known or currently deemed immaterial may apply.
Issue Risk/Uncertainty Mitigation Update
Strategy macroeconomic conditions The company continues to carefully monitor global and UK macroeconomic The Board has a very experienced management team that is highly motivated to The Board and Executive Directors remain focused on ensuring the delivery of
variables and the impact they may have on the media economy and specifically deliver its strategy. the Group strategy.
consumer expenditure and business confidence. With inflation and interest
rates at generational highs the cost of living crisis will reduce household
disposable income and therefore impact retail activity and spend on other
non-essential services. All the major global tech platforms and digital brands The Executive Directors are fully engaged on the operating performance of the The Executive Directors carefully consider the geopolitical challenges and
are adapting their resource structure to counteract the recessionary impact on business and regular updates are provided to the Board on strategic economic uncertainty and pressures this has on the financial performance of
forecasted digital advertising levels. Our new operating model is being shaped initiatives. the Group. Timely action is taken to manage the cost base.
to refocus our business on a new content strategy to increase engagement
levels with our customers and also to target new clients with a new multimedia
proposition to maximise revenue opportunities during the downturn.
The Executive Directors consider AI technologies and new platforms and
entrants to the market on an ongoing basis.
Cyber security and data migration The Group is at risk of a cyber-attack on systems and websites. In-line with industry best-practice, multiple layers of security systems are A strategic programme to migrate all of our core systems to Google Cloud
in-place. These include managed firewalls, managed DDoS protection, anti-virus Platform has been completed. Cyber insurance is in place, including for our
software, Single-Sign-On, ransomware protection and a managed email platform recent acquisition The Business Magazine Group.
that has a number of sophisticated security configurations built-in.
We have added a number of security improvements to our recent acquisitions,
The principal news websites are hosted independently of the main IT whilst the integration of acquisitions is in progress.
infrastructure on Amazon Web Services under the management of a third-party
vendor.
The change advisory board regularly review the internal risk register and
update accordingly in response to any identified issues.
Infrastructure and operations The Group is reliant on an effective and efficient infrastructure to support The Group has established a risk management framework which is overseen by the A strategic programme to migrate all of our core system to Google Cloud
its operations. This includes a robust: IT Infrastructure, regulatory Risk Management Committee and includes senior management representing all Platform has been completed. A Cyber insurance policy is in place to cover the
compliance framework, financial control environment and contracts with operations across the Group. Group, as is Business interruption cover.
suppliers, in particular for our websites and printing and distribution of our
newspapers.
A strategic programme is in place to migrate all existing IT infrastructure to We have added a number of security improvements to our recent acquisitions,
Google's Cloud Platform. As well as providing increased physical security and whilst the integration of acquisitions is in progress.
The operations of the Group will be adversely impacted by issues due to the resilience, this migration will provide an opportunity for a review of the
loss of key infrastructure, weaknesses in the control environment and loss of cyber security risks for each workload being migrated and a reduction in the
key suppliers. total number of systems in operation.
Data Protection - GDPR Legal Counsel conducts assessments of data quality. Use of data is overseen by The Data Protection Officer, IT Business Systems Director and IT & Regular review of policies and processes are conducted including the
Legal Counsel and advice is sought by sales and marketing teams as and when Operations Director ensure that all systems are UK GDPR & PCI compliant population of Record of Processing Activity and data mapping across the
data is being sourced. Implementation of UK GDPR / DPA 2018 / PECR is subject and that agents are updating the customer records in the CRM to ensure we are company to ensure UK GDPR compliance of all data processing across the
to ongoing monitoring and this includes mandatory company training, and compliant and to ensure data is captured and managed within the ICO guidelines business.
working with IT and any other relevant departments, as required. DPIAs and and GDPR requirements.
ITRAs are utilised to manage risk.
All new supplier contracts are reviewed by Legal Counsel to ensure all
required data protection provisions are included and signed up to by the
supplier. All contracts are reviewed by the Legal team prior to signing.
Intra-group data sharing agreement now complete. UK GDPR compliance across the
Group is the subject of an ongoing improvement programme.
People Loss of key senior management would restrict our ability to deliver the Group Review of succession planning. We have commenced our review of succession planning.
strategy.
Review all aspects of remuneration and incentives in line with the pivoting of The Executive Directors receive regular updates on key people metrics and
the business model to original content, developing a long term committed and trends.
engaged customer base and enduring commercial partnerships.
Digital Audience and revenue Changes to algorithms by Google and Facebook impacts audience volumes - with a The digital revenue strategy is led by an experienced Executive management
follow on impact on Digital Advertising revenues. team, to drive digital audience and revenue, by formulating a digital strategy
across the group (content and commercial development), highlight new
Government Regulatory Bodies (including but not limited to the ICO) are opportunities (and threats) to the Board on a timeous basis, monitor new
imposing greater regulation on our digital business and industry, which could digital tech requirements and ensure digital talent/resource and structures
severely impact our ability to operate in a digital environment. fit overall business requirements.
To support this strategy, National World is working with partners to add new
functionality to our websites and support our editorial teams with new tools
to increase user registrations and drive deeper engagement.
Management are also working with industry bodies (NMA), and government
departments over the Digital Markets Competition Regime, which is designed to
level the playing field between publishers and large tech platforms, in order
to secure a beneficial outcome for National World.
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