Paper results

Scotsman owner benefits from new operating model

Scotsman and Princes Street
The Scotsman has moved to new offices in Princes Street

Owner of the The Scotsman newspaper, National World, has posted a robust set of results and a higher dividend on the back of a reshaping of the business.

Following a series of acquisitions, adjusted pre-tax profit came in at £9.7 million, from £9.3m on rise in revenue to £88.4m from £84.1m. Digital revenue rose 13%.

The board paid a maiden dividend of 0.5 pence per share for 2023 and proposes a 0.55p payout for 2024.

Chairman David Montgomery, said the company had “continued to live up to its objectives in its third year of operation” and said it maintains its guidance for 2024 to deliver revenue of £100 million, with an improved EBITDA margin.

“Amidst further consolidation plus cost efficiency and productivity enhancements the pace of the operating model change has accelerated with initiatives embedded in both the heritage portfolio and newly acquired assets,” he said.

“The future model is based on original and expert content in specific sectors and genres to better serve both consumers and advertisers. Examples are business information, including events and the transformation of premium brands to populate all platforms reaching a wider, increasingly global audience.

“Several market leading initiatives, particularly in video and the launch of our local social media platform “Your World,” will further add value in 2024. At the same time, we have demonstrated the beneficial impact of extending our infrastructure to bolt-on a range of content businesses. We will continue to examine acquisition opportunities.”

The group achieved annualised costs savings of £6m, with restructuring costs of £3.6m expensed in the period.

There was a closing cash balance of £10.7m at 30 December 2023 (2022: £27m). This is after a £12.9m cash consideration for seven acquisitions, £2.5m final deferred consideration payment to previous owner JPIMedia and the repayment of a £1m loan note.

The group completed seven acquisitions completed in the period, contributing revenues of £10.5m and adjusted EBITDA of £1.7m, with the bulk of this flowing in the second half, (with Insider Media acquired in April and MNA and PCS in September).

These acquisitions cost £14.4 million, funded from existing cash resources. In 2024, the acquisitions are expected to more than double their EBITDA contribution.

Video revenue has grown to £1.5m, 87% year-on-year growth with 398 million video views (+12% year-on-year).  

New apps and websites were introduced, starting with The Scotsman, Yorkshire Post and the NewsLetter. The Scotsman achieved a 7% annual subscription growth in 2023 since the changes were implemented.

The board said:” “In quarter one 2024, our EBITDA is slightly higher than internal expectations with total revenue slightly lower than internal expectations. There is still some continuing market volatility as audience and programmatic yields are impacted by algorithm changes by the global social media platforms.

“Management’s continuing development of a sustainable and independent revenue model addresses these headwinds. Initiatives include focus on an original quality content agenda across all platforms that does not duplicate other providers as well as further technology enhancements to gather greater volumes of content and streamline production.

“In addition, we will continue to pursue acquisition opportunities, primarily targeting businesses that will enhance the group’s digital capability.”

Last year, the company registered its interest in buying the Telegraph Media Group after it was put up sale by lenders seeking to recover debts from previous owners, the Barclay family.

National World today said it had renewed its potential pursuit of the business.

Telegraph rates Scottish edition
The Telegraph is on the National World radar

“Our view remains that National World remains the best qualified among the various candidates for such a deal both in terms of industry qualification and also editorial independence, as well as the absence of any competition issues,” it said. The Scotsman and Telegraph titles shared the same Barclay Brothers owner during Andrew Neil’s stint as editorial overseer.

National World said it has been using AI for advertising and page production for its newspapers in a bid to improve efficiency and reduce costs.

“AI has been harnessed to boost local video advertising sales, video news bulletins and automated print pages,” the company said.

“We are currently producing around 200 pages per week through AI production and aim to increase this to around half of all pages produced for our weekly titles by the end of 2024.

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