Magazine publisher Hearst UK is hoping for a “full recovery” to its digital advertising revenue after it was hard hit by platform algorithm changes in 2023.
The publisher made an operating loss of £3.6m in 2023 following an operating profit of £5.1m in 2022. Excluding exceptional items, it reported an operating profit of £6.1m in 2022 and a loss of £1m in 2023.
Hearst UK is the trading name of The National Magazine Company Ltd which said in its 2023 accounts that it “projects an operating profit and positive cash flow in the coming year”.
And it reported profit before tax of £685,000, compared to pre-tax profit of £6.1m in 2022.
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Hearst UK’s biggest brands include Elle, Good Housekeeping, Country Living, Women’s Health, Runner’s World, Inside Soap and Digital Spy.
Its revenue fell by 8% in 2023 to £111.9m in the year to 31 December 2023. Revenues have now fallen every year since 2012 with the exception of 2021 when they were higher than the 2020 Covid-induced low.
Print revenue “continued to contract, but at a much lower pace, owing to stronger newsstand and subscription performance”.
But it was digital revenue that saw the most turbulence, with the company blaming algorithm updates across “several platforms”, likely referring to Google and Facebook, that affected search and other traffic referrals.
Unique visitors to Hearst UK websites were down by almost a third (31%) compared to 2022, from average monthly visitors of 64.9 million to 45 million.
The publisher said there was a "limited" impact on direct advertising but that indirect revenue (eg. programmatic) was worse hit.
As a result digital advertising revenue was down 17% in 2023, but it said a “full recovery” growing at least 19% is expected this year.
Hearst has been seeking to focus on both "maximising" newsstand revenues from its magazines and growing digital subscriptions.
Although it saw subscriptions growth during the Covid-19 pandemic, it has seen "longstanding decline" in subscriber numbers. However, this pattern ended last year with 2% year-on-year growth to 952,000 by the end of 2023.
Hearst UK has been adding membership launches going beyond the usual subscription offering, including on Women's Health, Men's Health and Good Housekeeping, as well as improving its digital products and introducing more bundles.
The company also recorded "strong growth" in its licensing business and saw "robust" affiliate revenue performance, it said.
But its cash in the bank at the end of 2022 of £27.6m more than halved to £13.1m by the end of 2023.
The operations of Hearst UK Ltd, which published Men’s Health, Women’s Health and Runner’s World, were moved under the National Magazine Company umbrella in 2023. Hearst UK is owned by US-based Hearst Communications.
Remuneration of the highest-paid director (which typically includes bonuses as well as salary) at The National Magazine Company increased from £145,000 in 2022 to £546,000.
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