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Archant reports first increase in revenues and profits in eight years Archant reports first increase in revenues and profits in eight years
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Archant has reported its first revenue and profit growth in eight years, bucking the tough market that has hammered rival newspaper groups.Archant has reported its first revenue and profit growth in eight years, bucking the tough market that has hammered rival newspaper groups.
Archant, publisher of a stable of regional newspapers including the UK’s largest in Norwich-based Eastern Daily Press, said there has been modest revenue growth in the first half of the year – thought to be the first in about eight years.Archant, publisher of a stable of regional newspapers including the UK’s largest in Norwich-based Eastern Daily Press, said there has been modest revenue growth in the first half of the year – thought to be the first in about eight years.
The group, which issued shareholders with a snapshot of its performance to date on Friday, said it is also on track to increase full-year profits for the first time in around eight years.The group, which issued shareholders with a snapshot of its performance to date on Friday, said it is also on track to increase full-year profits for the first time in around eight years.
This compares to rivals Johnston Press and Trinity Mirror, which recently reported sliding profits and 4.6% and 8.7% first half declines in total revenues respectively. This compares favourably with rivals Johnston Press and Trinity Mirror, which recently reported sliding profits and 4.6% and 8.7% first-half declines in total revenues respectively.
Archant said it has managed to limit the first-half overall advertising decline at its newspapers to just 1%, this compares to 13.7% at Trinity Mirror and 5.1% at Johnston Press. Archant said it has managed to limit the first-half overall advertising decline at its newspapers to just 1%, this compares with 13.7% at Trinity Mirror and 5.1% at Johnston Press.
Simon Bax, Archant chairman, acknowledged the strong performance but warned that the market remains tough.Simon Bax, Archant chairman, acknowledged the strong performance but warned that the market remains tough.
“Our half year financial performance gives us every reason to be positive for the second half of the year,” he said in a letter to shareholders. “However, the general environment for local media companies remains challenging, as is evidenced by recent announcements from some other companies in the sector. This emphasises the need for us to continue to focus on improving and strengthening our business.” “Our half-year financial performance gives us every reason to be positive for the second half of the year,” he wrote in a letter to shareholders. “However, the general environment for local media companies remains challenging, as is evidenced by recent announcements from some other companies in the sector. This emphasises the need for us to continue to focus on improving and strengthening our business.”
Bax said the large-scale changes introduced by chief executive Jeff Henry, the former senior ITV executive hired last August, have started to pay off.Bax said the large-scale changes introduced by chief executive Jeff Henry, the former senior ITV executive hired last August, have started to pay off.
Since Henry joined, he has streamlined the functioning of the publisher’s 33 operating units, part of a wider strategy called One Archant, and introduced initiatives such as an investigations unit and significantly boosting parliamentary coverage.Since Henry joined, he has streamlined the functioning of the publisher’s 33 operating units, part of a wider strategy called One Archant, and introduced initiatives such as an investigations unit and significantly boosting parliamentary coverage.
“We have invested back into content,” said Henry. “Investing across our titles is definitely paying dividends. The core of the business is performing well, there are fewer barriers to change, and clarity in reporting lines means that there is less duplication.”“We have invested back into content,” said Henry. “Investing across our titles is definitely paying dividends. The core of the business is performing well, there are fewer barriers to change, and clarity in reporting lines means that there is less duplication.”
The company said it increased digital revenues in the first half, but “at lower levels than we would wish”.The company said it increased digital revenues in the first half, but “at lower levels than we would wish”.
Henry has also sold off three magazines, invested in Norfolk rural broadband service WiSpire and cut costs at its local TV service, Mustard.Henry has also sold off three magazines, invested in Norfolk rural broadband service WiSpire and cut costs at its local TV service, Mustard.
Henry said Mustard, which aired two of Norwich City’s pre-season friendlies, was still not yet profitable but it was now “moving in the right direction”.Henry said Mustard, which aired two of Norwich City’s pre-season friendlies, was still not yet profitable but it was now “moving in the right direction”.
The drop in the health of the newspaper market has renewed speculation of consolidation among the regional groups.The drop in the health of the newspaper market has renewed speculation of consolidation among the regional groups.
Henry distanced Archant from being a major player in any potential rounds of consolidation, warning that stripping costs was no substitute for growth.Henry distanced Archant from being a major player in any potential rounds of consolidation, warning that stripping costs was no substitute for growth.
“As far as we are concerned I don’t believe we need to consolidate to make a stronger Archant,” he said. “At Archant it isn’t simply about taking cost out of business, it is about growth. It may only be small but it is nevertheless revenue growth. I can see how huge amounts of costs can be taken out by industry consolidation, but fundamentally you still need growth”.“As far as we are concerned I don’t believe we need to consolidate to make a stronger Archant,” he said. “At Archant it isn’t simply about taking cost out of business, it is about growth. It may only be small but it is nevertheless revenue growth. I can see how huge amounts of costs can be taken out by industry consolidation, but fundamentally you still need growth”.