National World executive chairman David Montgomery has set out his vision for the publisher as it reported a dip in revenue but increased profit for 2022 thanks to cost savings.
Some two years after buying the former Johnston Press/JPI Media newspaper portfolio, Montgomery, a former chief executive of the Mirror Group (now Reach), said his mantra for the publisher’s creative workforce is: “Think local, act national, be global.”
This means he said: “The expansion and ambition of the company is facilitated by the strategy of producing original content rather than replicating the news market and the realisation that a wider content agenda will attract viewers both nationally and internationally.”
National World reported revenue down £1.9m year-on-year to £84.1m and pre-tax profit up from £8.6m to £9.3m. The company made annualised cost savings of £4m.
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Digital revenue was up 26% year-on-year to £16.3m, representing 20% of the total (compared to 25% at rival publisher Reach). Video advertising doubled year-on-year.
National World reported digital revenue up 42% year-on-year in the first half, slowing to 14% in the second and then 9% in January and February this year (compared with Reach which reported revenue up 1% in 2022 – but down 6% in the final quarter as the cost of living crisis hit).
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A change to local titles, Montgomery said, could see them more aligned by the most relevant specialisms to their market: for example, in Yorkshire, Scotland and Northern Ireland heritage, arts and culture, business, environment and rural affairs are all areas to be prioritised. National World owns legacy titles the Yorkshire Post, The Scotsman and The Belfast News Letter in these areas.
“Other regional daily titles are being relaunched in 2023 to relate more closely to metropolitan markets they serve and organised in formats reflecting online characteristics,” Montgomery added in his statement alongside the company’s full-year results.
This year, Montgomery said in his statement, would be “the year of a new operating model propelled through careful investment, taking that ambition a step forward while maintaining profitability”.
This new model means, he said: “The company is investing in pivoting towards the customer as a first priority, targeting content that has relevance and usefulness to individuals and communities. The ethos is predominantly middle market, family and consumer-orientated.”
Montgomery said the company would go from a “digital first” model to being “digital only”, although he suggested it will still produce print newspapers nonetheless.
“Newspapers will be produced on that basis rather than being the products of multiple industrial processes that should have been abandoned years ago,” he said.
“Ironically the printed newspaper products will achieve greater quality and relevance, in part mirroring characteristics of social media but strictly curated. True to our publishing heritage we will make our small weekly papers exclusively local in all content – banishing the generic content that was a feature of previous and counterproductive cost reduction measures.”
As well as the legacy titles bought from JPI Media, National World now owns 16 City World websites, which it says means it provides “full coverage” of cities in England and Scotland, plus celebrity-focused People World and sports website 3 Added Minutes. It has also launched a US version of its UK national website National World to begin creating a “global footprint”.
Montgomery claimed that the publisher’s growth since he bought it two years ago was a “considerable achievement but one not based on the traditional cost-cutting of the sector.
“While promoting efficiency through streamlining central services and the greater use of technology, National World has continuously invested in the talent and creativity of its staff to promote more and better quality products.”
However, the overall National World workforce did reduce by 10% from 1,216 on 1 January 2022 to 1,099 on 31 December and the group did run a restructuring programme to “drive efficiencies and tightly manage all operating costs” last year.
The results statement revealed this created annualised cost savings of £4m, with restructuring and redundancy costs of £3.3m in 2022 (compared to cost savings of £3.6m in 2021).
The company said its original investment in buying out JPI Media for £10.2m had now been repaid almost twice over.
The group had an average of monthly unique users of 42 million and page views of 111 million in 2022, up from 37 million and 110 million. It said audience performance had been “volatile” due primarily to Google algorithm changes and macroeconomic conditions. Only one National Website appears in Press Gazette’s monthly ranking of the UK’s top 50 news websites – The Scotsman, with an audience of 4.1 million in January.
Digital growth partially offset an 8% decline in print revenue to £66.3m, with a higher drop in the second half of the year of 12% put down to the Queen’s death and worsened economic conditions.
Advertising revenue fell by 6% year-on-year to £31.9m, down 14% in the second half of the year due to a “more uncertain trading environment”.
Circulation revenue dropped by 9% to £31.6m, falling by 8% in the first half of the year and 11% in the second. Its average monthly circulation volumes were 1.8 million for the daily newspapers and 0.8 million for the weeklies, declines of 18% and 16% respectively but this was partially mitigated by cover price increases.
The company had a cash balance at the end of the year of £27m, up £4m from a year earlier, which it said gave it “significant financial flexibility”.
National World is now preparing to give its first dividend of 0.5 pence per share subject to shareholder approval.
National World’s figures for the year so far do not include its recent acquisitions of digital football publisher Scoop Dragon and video-first publisher News Chain, which it said would further “add over 10% audience improvement”.
“Trading is expected to remain challenging for the first half,” the publisher said. “However, management continues to innovate to address the headwinds faced across the industry, including revenue initiatives, while transitioning to a digital-only operational model providing customers with quality and original content across all genres and platforms. The group maintains its performance expectations for the year.”
National World salary plea
UPDATE on 17 March: The National Union of Journalists has urged National World to follow its positive financial figures by accepting pay claims put forward by local chapels at the publisher.
According to the NUJ, a newly-qualified senior journalist at some National World titles can expect to earn £22,753 per year – compared to £26,855 for journalists at the same stage of their career at flagship title the Yorkshire Post.
Following its own pay negotiations, senior journalists at Reach earn a minimum of £30,000. National World journalists want a similar minimum salary floor to be set.
They are also asking for a 10% pay rise for all editorial staff to make sure those who would not benefit from a rise in the minimum salary do not suffer a real-terms cut.
An NUJ National World group chapel representative said in a statement on Friday: “While the company’s latest financial results offer welcome news on the digital growth of the business, the increase in operating profits has not been without sacrifice. A number of newsrooms have seen cuts to their teams over the past 12 months, with experienced and respected journalists leaving as a result.
“Those that remain are working harder than ever and have – as Mr Montgomery noted – shown great dedication and professionalism despite the challenges faced. We hope to see that commitment now rewarded with a meaningful pay rise that not only recognises the financial pressures facing individual staff, but also addresses disparities that exist within our newsrooms.”
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