National World has said it expects to return a shareholder dividend by the time of its full-year results in March 2023 despite the ongoing global economic turmoil.
In its half-year results published on Monday, the business revealed it had grown its adjusted pre-tax profit by 60% year-on-year from £3.9m to £5.9m in the first half of 2022.
Total revenue rose at the regional publisher by 3% to £43.5m as digital revenue increases made up for declining print circulations.
But reflecting worldwide supply chain issues, the company reported its printing and paper costs its printing and paper costs had risen by £300,000 year-on-year from £6.1m in the first half of 2021 to £6.4m in H1 2022.
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Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) was up 28% to £5.9m and operating profit up 36% to £5.7m.
National World digital revenues
Digital revenue grew 41% year-on-year to £8.2m, £5m of which came from digital advertising, itself up 43%.
Digital subscription revenue grew 14% to £800,000 despite a decrease in digital subscribers from 20,000 to 19,000 between the end of December 2021 and the start of July. Average monthly page views across the half year stood at 15.6 million, and the company reported video revenue doubled in the year.
Buoyed by the digital drive, National World said: “At this stage, the board expects the business will perform in line with its expectations.
“As the group successfully implements its strategy, the board anticipates being able to initiate dividends at the time of announcing the 2022 full year results with a progressive dividend policy.”
National World print revenues
Print revenue, meanwhile, declined by £1m, or 3%, year-on-year. The drop was mostly accounted for by an 8% circulation decline; print advertising revenue grew by 1% year-on-year to £16.7m and overtook print circulation now on £16.5m.
The circulation drop was steepest in the second quarter of 2022, with a decline of 5% in Q1 and 11% in Q2. The company attributed this to “the impact of the slowdown in the UK economy in 2022 and marginally stronger comparatives as Covid-19 restrictions had been lifted in the second quarter of 2021”.
Average monthly circulation for H1 2022 stood at 1.9 million for dailies and 900,000 for weeklies, “representing an annual decline of 17% and 14% respectively”.
Print subscription revenue however declined by only 2% year-on-year to £1.5m. Print revenue in general continues to account for about 80% of the total for the business.
Printing costs escalate
National World said it incurred £6.4m in “newsprint and production costs” in the half year, an approximately 5% increase on the first half of 2021.
The increase, it said, reflected “a significant increase in newsprint prices and an increase in printing costs” – although the rises were offset “by a reduction in newsprint volumes” driven by “a reduction in circulation and reduced pagination”.
The company is not the first to declare major increases in printing costs recently: in its half-year results last week, Reach announced its newsprint costs had leapt 54% from £25.2m in H1 2021 to £38.8m in 2022 and this week it announced its plan to leave the free newspaper market in Manchester in part due to “the exceptional inflationary pressures impacting print”.
Contrary to its rising print costs, labour costs at National World dropped by almost 3% or £600,000 year-on-year in the half to £21.1m. Total employment dropped from 1,262 to 1,179 over the same period, a fall of approximately 6.5%.
Press Gazette reported in June that National World was cutting around 30 jobs around the UK, to be replaced with the same number of digital roles at its Metro World websites, for example London World and Manchester World.
Seemingly in reference to that redistribution of staff, National World chairman David Montgomery said in the results that the company’s “transformation is underpinned by re-skilling of the workforce to reduce dependency on news by widening the agenda with original content that can be monetised”.
And of the World division the results also said they target “the middle market metropolitan consumer, providing reliable content as distinct from the celebrity based red top market”.
However one insider at National World was unimpressed with the results, telling Press Gazette: “If you read between the lines of these results, it is clear that for National World to remain profitable in the future within its current business model, ownership will demand more from fewer staff, continue to prioritise clickbait over quality, and follow the model of other companies in keeping pay exploitatively low.
“Until the so-called investment results in growing rather than cutting staff numbers for existing titles, serious investment in quality digital infrastructure, and decent pay, David Montgomery will be the latest owner to fail readers and staff for a quick buck.”
A National World spokesperson declined to comment beyond the results.
Picture: National World
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