Press and Journal, Beano and Stylist publisher DC Thomson has reported its lowest revenue since 2003 because of the hit from the Covid-19 pandemic, particularly in advertising and events.
But canny investments from its family owners mean it also reported its highest ever pre-tax profits.
DC Thomson & Company Ltd’s revenue for the year to 31 March 2021 was £160.2m, down 11% from £180.4m in the previous year which included only the initial weeks of the Covid-19 pandemic.
However it said it saw “good recovery” in the second half of the year after focusing on stabilising revenues, in particular by growing digital revenues and subscriptions which mitigated a drop in advertising and events.
The company, which employs around 1,600 people, also said the reduction in revenue was offset by an improvement in gross margin and “significant” overhead cost reductions in areas including staff travel and marketing.
DC Thomson also revealed its highest-ever pre-tax profits at £338.7m for the year to 31 March but this was largely put down to an uplift at its outside investments.
In the year ending March 2020, the company reported a loss of £180m after the first Covid-19 lockdown caused a temporary slump in the value of its investments. But in the following year, the investments did well and profits shot up.
The company describes itself as having a "strong track record in entrepreneurial investment". A statement accompanying its accounts on Companies House stated: “Investment income in the year was down as dividends were cut across the investment portfolio but capital values increased substantially."
During the first lockdown 23% of DC Thomson staff were furloughed using the Government’s Covid-19 job retention scheme and the company topped up the salary of all those affected from the 80% grant to 100%.
The 117-year-old family-owned company contains several divisions which, as well as the newspaper and magazine businesses, include contract printing arm Discovery Print, genealogy business Findmypast and cloud solutions business Brightsolid.
Circulation remained by far the biggest revenue generator for the business overall on £78.2m, despite a drop of 5%. Newspaper newsstand revenues fell by 13% but saw subscriptions rise by 112%. Magazines saw a newsstand fall of 4% and subscription increase of 32%.
However genealogy revenues overtook advertising, having grown by 19% to £22.2m while ads fell by 44% to £19.1m.
Notably, the free Stylist magazine was not printed for six months between late March to September 2020, although the company also said it was "fortunate" to benefit from local and national government advertising campaigns on coronavirus. On the other side, DC Thomson said people turned to Findmypast as they looked for ways to occupy themselves online.
The ratio of circulation to advertising revenue has moved further away from advertising - from 71% circulation to 29% ads in 2020 to 81% and 19% respectively. A statement accompanying the accounts said this "gives our business some additional protection against advertising declines compared to other publishing businesses and is important in the context of the competition from businesses such as Facebook and Google".
As at many publishers during the pandemic the biggest percentage drop in revenue was in events, which fell by 85% to £0.6m in the year as in-person meet-ups were not possible.
DC Thomson chairman Christopher Thomson said: “Despite the challenges of the first pandemic year, the picture that our financial results shows is one of resilience, strength and stability. This is testament to the hard work of all our colleagues across the business.
“We are seeing good revenue recovery. We have confidence that our subscriber and membership strategies are the right ones and are already seeing good engagement and growth.
“We are transforming our media business, investing in technology and talent and building loyal communities by informing, entertaining and delighting our audiences.”
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Last month DC Thomson promoted its chief strategy and transformation officer Rebecca Miskin to chief executive of the media business, bringing all the media properties together "as a unified business powered by content, data, technology and talent".
Miskin told Press Gazette last month that the company's "word for 2022 is definitely going to be ‘focus’: a focus on growth and a focus on purpose that will ultimately lead to a focus on doing fewer things but better and more distinctive".
DC Thomson's digital transformation programme has "gathered pace" since March, the company said, and means it is "building a sustainable future" for its media brands and helping revenues continue to recover.
The newsroom transformation has included a move to have specialist teams creating content for each of several main subject areas with a focus on giving audiences “the content they want, when and how they want it”. This involves making more use of video, live broadcasting, programme making, audio producing, animation and interactive graphics with the ultimate goal of increasing digital subscribers.
In a report accompanying the accounts, Thomson said consumers had shown a “very reassuring loyalty to our key brands” during the pandemic and that print “will continue to be very important, but naturally increasingly the future success of a major part of our business will come from the digital space”.
DC Thomson’s newspaper titles include The Press and Journal and Evening Express based in Aberdeen, The Courier and Evening Telegraph in Dundee, and national weekly title The Sunday Post.
Thomson added: “In the past many media businesses moved into digital areas perhaps without a clear vision of how significant investment and the giving away of expensively created content would reduce the value of assets so carefully built up over the years.
“In newspapers, the heart of DC Thomson, our main competitors are no longer the newspaper groups that we grew up with but digital giants and television businesses.
“We are now, however, in a very good position to make use of our resources to build on our brands and move into developing content for both print and digital media which has significant value to our customers.”
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