Despite 'challenging' conditions, Archant reports half-year increases in revenue and profits - Press Gazette

Despite 'challenging' conditions, Archant reports half-year increases in revenue and profits

Archant has claimed “modest" year-on-year revenue growth and an increase in profits in the first half of 2015.

The regional publisher said in a statement that its newspaper advertising revenue fell by 1 per cent on the figure from the first half of 2014.

Johnston Press, Trinity Mirror and the Daily Mail and General Trust have each reported larger print advertising revenue declines and described trading conditions as "challenging".

Archant shareholders were told in a letter that circulation and digital revenues have grown year on year during the period. Magazine advertising revenue, meanwhile, was down 3 per cent, Archant said.

In a statement on its performance, Archant said its “profits are ahead of budget and the previous year, despite a difficult industry background, and modest like-for-like revenue growth”.

The Guardian reports that the publisher's revenue is thought to have grown for the first time in around eight years. The newspaper also reports that Archant is set to report a full-year increase in profits for the first time in this period.

Chairman Simon Bax said: "Our plans to make the core of the business robust are progressing well.

"Our half-year financial performance gives us every reason to be positive for the second half of the year, however, the general environment for local media companies remains challenging.”

He added: “The One Archant strategy is bearing fruit. The core of the business is performing well, there are fewer barriers to change, and clarity in reporting lines means that there is less duplication.

"With greater ability to implement Archant-wide initiatives and thus maximise the value of our total portfolio, the company is seeing significant benefits in both co-operation and morale.”

Chief executive Jeff Henry, said: “We have had a good first six months of the year against challenging conditions. Congratulations should go to all of our colleagues for a great team effort in out-performing our industry peers and setting the company firmly in the right direction.”

Henry told The Guardian that Archant's local TV station Mustard, which has cut costs, is not profitable but is "moving in the right direction".

He also reportedly distanced Archant from consolidation among regional newspaper groups and said cost-cutting is no substitute for growth.

He is quoted as saying: “As far as we are concerned I don’t believe we need to consolidate to make a stronger Archant… At Archant it isn’t simply about taking cost out of business, it is about growth. It may only be small but it is nevertheless revenue growth. I can see how huge amounts of costs can be taken out by industry consolidation, but fundamentally you still need growth”.

Archant said that its circulation revenue had grown "partly because price increases on the daily titles have more than offset circulation declines, and in magazines where circulation revenues have improved, particularly after increasing the availability of a number of key titles".

During the period, Archant sold three magazines – English Home, English Garden and Discover Britain – which it “did not believe… could attain market leadership”.

Archant also invested in WiSpire, a rural broadband service in Norfolk, and make progress “in plans to sell offices which are no longer suitable for purpose in Ipswich and Ilford with staff moving to more appropriate rented properties”.

Archant added: “Cash generation has continued strongly, with £4m generated in the period and cash on hand of £6.8m at the end of June. In July a new four-year bank refinancing was completed on markedly improved terms than previously.”

Read the full Archant statement here.



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