Squeeze on sales
‘Brand loyalty’ key as DC Thomson swings to loss
Print sales hit during lockdown
DC Thomson, publisher of the P&J, Courier and Sunday Post, swung to a loss of £180m in the year to the end of March 2020 from a pre-tax profit of £21m in the previous year.
It was impacted by the initial affects of the Covid-19 lockdown which caused a temporary slump in the value of company investments.
It also booked a £79.5m write-down in the value of its Wild & Wolf gifts and retail business and on its print newspaper and magazine titles and now plans to sell Wild & Wolf.
The company said its investments more than recovered their March drop in value later in the year.
Group revenue for the year was down 2.8% to £214.8m (2019: £220.9m). Recurring sales revenue fell by 1.6% to £198.5m.
At the height of the UK’s first lockdown – April to June – advertising revenue fell by more than 60% year-on-year and newsstand circulations were down 16%.
Chairman Christopher Thomson said the ratio of 71% circulation revenue to 29% advertising in the 2020 full-year (from 68% to 32% in 2019) gave the business “some additional protection against declines compared to other publishing businesses and is important in the context of the competition from businesses such as Facebook and Google”.
Mr Thomson said the company had been preparing for a continuation in the decline in traditional revenues and Covid-19 had accelerated this trend.
The Stylist free magazines division saw a 40% drop in advertising revenue caused by the closure of men’s weekly Shortlist in November 2018. Stylist was forced to go digital-only.
Mr Thomson said: “The Covid-19 pandemic has been, we expect, a one-off event but even so we have taken a cautious accounting view which does not affect our consistent view that our titles and brands have a long term future and value to our stakeholders.
“We still have strong belief in all of our established brands and are engaged in both strengthening the underlying brands by continued cost efficiencies and in working on building new valuable revenue streams in all businesses.”
Mr Thomson said the company had seen stronger than expected copy sales during lockdown and good growth in both digital and print subscriptions in almost all areas.
Pre-Covid, advertising revenue fell by 7.5% to £34.3m and circulation revenue grew by 3.1% to £82m with the inclusion of Aceville Publications and PSP Media Group, bought in September 2018 and April 2019 respectively. Without these, advertising revenue fell 10% and circulation revenue fell 2.4%.
Newspaper circulation revenue fell by 5%, with cover price rises offsetting volume declines, while like-for-like magazine print copy sales fell 1%.
The company was “encouraged” by brand loyalty shown to some of its magazine brands. However, it closed five women’s and children’s magazines – Sweet, This Is, No. 1, Scottish Wedding and Slime Factory.
Events revenue grew by 32.2% to £4.1m but was largely brought to a halt by lockdown.
Other revenue streams include consumer products, down 1% to £35.4m, contract printing which fell by 8.6% to £3.2m, and a genealogy business which grew by 3.6% to £18.7m.
DC Thomson has launched a transformation programme including in its newsrooms, which will be “built around specialist teams serving specific audiences” so they can “better serve communities compelling, relevant content digitally and in print”.