Dennis Publishing reports £28.1m pre-tax loss but positive signs of subscription growth during lockdown

Dennis Publishing has reported revenue for the 18 months to the end of 2019 of £227.6m and said it expects to continue growing subscription income this year despite the Covid-19 crisis.

The magazine publisher’s new accounts, published under the name Broadleaf Topco after it was bought out by private equity firm Exponent in October 2018, show it made a loss before tax of £28.1m and an operating loss of £10m in the 18 months to the end of last year.

The longer that normal accounting period covers the period from the founding of new parent company Broadleaf Topco.

Dennis last month made almost 70 people, or about 15% of the workforce, redundant after its advertising and events revenues “deteriorated” during the Covid-19 crisis, but it avoided closing any titles unlike many other magazine publishers.

In the newly-filed Companies House accounts, chief executive James Tye said: “Since March 2020, the significant disruption resulting from the global measures taken to contain the spread of Covid-19 has led to a reduction in group revenues from the sale of advertising, the sale of magazines in retail shops and the sale of cars.

“However despite the significant challenges to these revenue streams, subscription revenue continues to be strong with limited impact.

“The directors believe the group is well placed to deliver increased growth in revenue from other existing streams and new initiatives including the successful launch of The Week Junior in the USA, further development of new lead generation activities, the replatforming of key titles’ websites which will launch across 2020 and the growth of subscription income.”

Almost 40% of the group’s revenue comes from subscriptions (£85.2m) and a quarter comes from advertising, content syndication and events (£57.6m).

Some 56% of revenue comes from subscriptions if ecommerce is excluded -the sale of cars through Buyacar brought in £73.7m.

Subscriber acquisition and retention rates have been in line with or even higher than during the same period last year since the Covid-19 lockdowns were introduced in the UK and US, the accounts said.

Dennis is therefore expecting that subscription revenue will remain “relatively stable” over the next 15 months.

Dennis is currently aiming to reduce its dependence on advertising revenue, particularly as digital ads bring in less money, by investing more in its subscription products.

Its print titles have “substantially outperformed the wider printed media market in the recent past”, it said, but nevertheless it is shifting focus online as changing consumer preferences threaten subscription, advertising and circulation revenues.

The company said last month that its total number of subscribers had risen by 9% since the start of lockdown, with a massive increase in subscribers at The Week Junior of 23%.

The Week Junior, which is almost entirely subscription based, has continued to grow since its launch in 2015, reaching an average circulation of 72,263 in the second half of 2019. Its US sister title was launched during lockdown in March with the aim of repeating its success.

Cyclist magazine saw lockdown subscriber growth of 39% and the circulation of Minecraft World was up by 89% since January, Dennis said.

Before the 2018 buyout Dennis’ accounts were published under the name Dennis Publishing Ltd. It had a turnover of £133.2m and made £7.1m in pre-tax profits in 2018.

The Broadleaf Topco accounts relate to all of Dennis’ activities globally, while the Dennis Publishing Ltd filings now only include its UK operation.

Some 68% of the group’s revenues come from the UK (£155.4m), with 4% from the rest of Europe and 28% from the US and the rest of the world.

The UK-only accounts report a turnover of £31.4m, operating loss of £2.1m and loss before tax of £1.7m.

Dennis expanded its US portfolio in early 2019 when it bought financial publishing business Kiplinger.

Across the UK and US it now publishes about 30 brands in the current affairs, technology, automotive and lifestyle sectors including The Week, Coach, and PC Pro.

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