National World plc

("the Company" or the Group")

Pre close trading update for the year ended 30 December 2023

FY23 Adjusted EBITDA* to exceed £9.0 million and will be above expectation

FY23 revenue expected to exceed £88.0 million, up 5%

Digital revenues increased by 13% (20% in H2)

Strong, debt-free balance sheet with a cash balance of £10.7 million as at 30 December 2023

Highlights

National World Chairman, David Montgomery, said:

"In 2023 the Group completed seven acquisitions of iconic and premium brands strengthening our portfolio, particularly in the events and business information sector. Our greater scale, combined with significant investment in innovation and automation, underpins our accelerating transition to a multi-platform content business, focused on creative and expert talent.

"We continue to re-train and re-equip both editorial and commercial staff to serve all platforms, including TV and video. Our sector consolidation of heritage brands has strengthened our expertise both geographically and by content genre, helping to distinguish us in news provision but also in the areas of information and entertainment. The short term augmentation of revenues will help propel a new sustainable model that will be evidenced during 2024 with the launch of a number of key initiatives now at an advanced stage of development.

"Given our scalable infrastructure the company will continue to seek to take advantage of further acquisitions that release significant synergies. Absent that, the 2024 trajectory is for revenues in excess of £100 million and an increased EBITDA margin."

Trading

Revenue for full year 2023 is expected to be not less than £88.0 million, underpinned by robust digital revenue growth of 13% with print revenue declining by 2% compared with the previous year.

Digital revenue improved by 13% overall, with growth of 20% in the second half of the year benefiting from acquisitions, stronger yields and increased video advertising. In the period the Group achieved average monthly page view growth of 25% with an average audience of 139 million, compared to 111 million in the prior period. Page view growth was 21% in the first half, followed by 30% growth in the second half, aided by acquisitions. 

Print advertising revenue declined by 1%, circulation revenue by 3% reflecting the continued subdued consumer confidence in the UK economy because of higher inflation and interest rates.

Events revenue will be reported separately in the 2023 annual results, having previously been reported across both print advertising and other print revenues.  Events is a key strategic growth area for the group and the year on year revenue growth can be attributed to the strategically important acquisition of Insider Media, completed in April 2023.

The Group has managed costs carefully throughout the year enabling it to support digital investments, mitigate the impact of inflationary cost pressures and also moderate the decline of heritage print revenue.

Targeted annualised cost savings of £6.0 million were achieved. Non-recurring costs for the period were £5.5 million including £3.9 million restructuring costs and £1.6 million incurred on advisory costs for completed and potential acquisitions.

Operational highlights

·      For the seven acquisitions completed in the period, the Group paid a total consideration of £14.4 million, (£13.0 million consideration net of cash acquired) funded from its existing cash resources. These contributed revenues of £10.6 million and adjusted EBITDA of £1.7 million in the period, with the bulk of this flowing in the second half.

·      Momentum behind our fast-growing video segment continues to build as our customer proposition transitions towards watching as well as reading. We now create large volumes of original, high-quality video produced by our network of journalists alongside user generated content and distributed across our website portfolio as well as social media and partner platforms. In 2023 continuing growth in output and audience supported annual revenue growth of over 50%. Our audience for video has grown by 18%, with 421 million video views on Group channels in 2023, compared to 357 million in 2022.

·      In H2 2023 we launched a TV brand - Shots! - to further leverage our content model, showcase our talent in longer form formats, and bring our content to viewers in high engagement environments. The brand currently airs on Freeview channel 276 as well as both live and on demand on ShotsTV.com. Shots! has already added over 35,000 hours of viewing to our audience engagement over the initial September-December period.

·      We started in 2023 a process of refocusing and upgrading our digital offering, with new apps and websites being introduced, starting with the premium brands, The Scotsman, Yorkshire Post and the Newsletter. The Scotsman achieved a 7% annual subscription growth in 2023 since the changes. With the new products now in place we are well set up to increase our loyal customer base even further in 2024, despite the possible market changes to cookies.

·      As part of our transition to a sustainable operating model and the focus on talent and expert and original content, the Company is redeploying its journalists on the basis of individual specialisms that will sharpen the competitiveness of the business and promote career advancement.

Financial position

The Group maintains a strong financial position with a cash balance of £10.7 million at the year end, after paying £13.0 million consideration for the acquisitions completed in the period, (net of cash acquired) repayment of the final tranche of the £2.5 million deferred consideration payable as a result of acquiring JPIMedia Publishing Limited and its subsidiaries and repayment of £1.0 million of loan notes, making the Group debt free.

The Board expects to recommend a final dividend in conjunction with the release of its audited results for the year ended 30 December 2023 on 21 March 2024.

Outlook

For 2024, we expect to deliver revenues in excess of £100 million and improved EBITDA margin.

Management continues to pursue acquisition opportunities, primarily targeting businesses that will enhance the Group's digital capability.

National World will release its audited results for the year ended 30 December 2023 on 21 March 2024.

*Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, implementation of IFRS16 and non-recurring items.

^Comprises editorial funding, press computer systems and other print revenue.

- Ends -

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Forward-looking statements

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement are based on certain factors and assumptions, including the directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Whilst the directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by applicable law or regulation, the Company undertakes no obligation to release publicly the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in the directors' expectations or to reflect events or circumstances after the date of this announcement.