Turnover at regional publisher Iliffe Media Group was down 11% last year but, but digital subscriptions growth presented some grounds for optimism.
The group has begun rolling out metered paywalls across its network of titles with the aim of encouraging readers to sign up to subscriptions giving them access to the whole site with no advertising, an app and digital newspaper editions. But bigger sites, such as Kent Online, will stay mainly advertising-funded.
Circulation and advertising revenues were hit by inflationary pressures and rising production costs, which resulted in cover prices being put up earlier than planned.
Turnover fell from £16.7m to £14.8m in the year to 31 March 2023, according to new Companies House consolidated accounts covering Iliffe Media Group and its share of Newbury News and Media (51%), Highland News and Media (49%) and Stratford News and Media (49%).
But losses for the year were smaller than the year before: losses before tax were down 12% from £2m to £1.8m, and operating losses reduced by 19% from £1.1m to £885,050.
The operating loss is stated after charging £220,011 for depreciation of owned assets, £710,060 for goodwill amortisation and £58,129 for licences and titles amortisation, and after crediting £126,543 for negative goodwill amortisation. These factors therefore account for £861,657 of the £885,050 operating losses. Cash flow generated from operations was £91,487.
Iliffe Media Group is a family-owned company and is currently led by chief executive Edward Iliffe.
It owns local newsbrands in print and online in the East Midlands, East Anglia and South East England including Kent Online, the Newark Advertiser, Suffolk News, Stratford Herald, Lynn News, Newsbury Today, Cambridge Independent, Bishop’s Stortford Independent and the Bury Free Press. It also owns Kent radio station KMFM and runs KMTV with the University of Kent.
Advertising revenue dipped marginally, by 1%, to £10.7m. Circulation revenue was harder hit, declining 42% to £3.2m.
In the accounts, Edward Iliffe noted the impact of “economic pressures on circulation and advertising revenues. Inflationary pressures on the business arising from the current political uncertainty have had an impact as the principal purchases within the group remain newsprint and print production, both of which have been adversely affected by rising energy costs.
“To mitigate the risks from economic pressures and rising costs, the group has increased cover prices earlier than budgeted and has undertaken a review of yields across our markets.”
He added: “To further mitigate these risks, the group entered into an arrangement for a new commercial and editorial publishing system, which will allow for further synergies to be made.
“The group continues to operate with centralised back office functions to further increase efficiencies…”
Iliffe also highlighted that the group is continuing “to develop its online and subscription offering to maximise revenue growth in this area”.
Several Iliffe news websites now have metered paywalls, with a set number of free articles before a paywall kicks in, with more due to be rolled out early this year.
Editorial director Ian Carter told Press Gazette: “We are seeing very positive signs in our digital subscription growth.
“We have ambitious targets for all our titles as part of our five-year strategy plan. We have implemented metered paywalls, coupled with digital editions and premium websites, on our titles in Newbury, New Milton and Stratford and will roll this out to the rest of the portfolio over the coming months.
“In Newbury we have converted 300 people to digital subscriptions within the first eight weeks.” The rate of acquisition is increasing weekly, he added.
Carter added: “Some of our websites, notably Kent Online which generated more than 25 million page views in December, will remain largely advertising-funded whilst we work on converting a small percentage of brand lovers to paying subscribers, while we will pursue a more aggressive paywall strategy in other markets.”
Iliffe also has a paid-for app called IM News containing content from across its local newsbrands. The IM News app and Newbury Today digital subscription each cost £54.89 per year.
On a technical level, the accounts said: “The group is committed [to] further developing its subscription and CRM [customer relationship management] platforms.”
The accounts tell a similar story to Scotland-based regional news and magazine publisher DC Thomson where revenue was flat year-on-year and digital subscriptions provided a bright light amid dips to circulation and advertising revenue.
The average number of Iliffe Media Group employees during the year dropped from 290 to 273 (including 144 to 137 in editorial and 89 to 64 in commercial).
The highest-paid director received £124,034 plus pension contributions of £6,310 – up 4% and 6% respectively.
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