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Chairman
Ian Park
Managing Director
Kevin Beatty
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Community Spirit
Local newspapers remain in tune with the needs and aspirations
of readers and advertisers. |
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The communities
which Northcliffe serves continue to have a healthy demand for the
printed word. Each week, Northcliffe sells around 7 million copies
of its paid-for titles and distributes 2.4 million copies of its
free newspapers. In addition, Northcliffe publishes highly targeted
niche titles covering a variety of interests and geographically
targeted advertising only products. On average, 650,000 copies of
these are distributed each week.
Despite increasing globalisation, greater social mobility and ever
more exposure to international culture through travel and television,
individuals and their families continue to anchor themselves firmly
in the communities in which they live. In general, people work,
shop and seek entertainment within just a few miles of their homes.
Against this backdrop, it is no accident that those local newspapers,
which remain in tune with the needs and aspirations of readers and
advertisers, continue to enjoy high household penetrations and market
shares. This is the context in which all of Northcliffe's daily,
weekly and niche publications, together with its comprehensive range
of web channels, work.
During 2002, Northcliffe embarked upon a programme of additional
substantial investment in editorial, marketing and circulation,
which will be sustained so as to publish better and more relevant
newspapers and deliver more potential customers for advertisers.
This investment contributed to an improvement in the sales trend
of the daily newspapers which was down just under 3% in the January
to June 2002 ABC period against a decline of 4.7% the previous year.
The sale of weekly titles continues to go from strength to strength,
recording an increase of 1.5%. Northcliffe's sale was marginally
ahead of the regional press industry in the January to June 2002
period.
Profits were down 4% in 2002 due to a lower contribution from contract
printing and additional investment in the newspapers. Advertising
revenues were up by 1.3% with growth from property, motors and other
classifieds offset in part by a decline of 3% in recruitment advertising.
Nationally booked revenues proved to be particularly resilient with
growth of 4%. Only new homes' advertising was down year-on-year.
Geographically, advertising revenue growth was robust in the Midlands,
the West country and Humberside. However, the titles in the south
east showed no growth and Bristol, Bath and Aberdeen recorded year-on-year
declines. 
Given an ever evolving and demanding media landscape in the UK,
Northcliffe has continued to address how it serves its advertising
customers. During the year, there was further progress in providing
clients with creativity and innovation through the advertising design
studio. This is an electronic library of finished advertisements,
visuals, photographs and advertisements created throughout the group.
It is accessed by advertising staff through the group's intranet.
This creativity played a part in Northcliffe winning almost 50%
of the creative awards at this year's Newspaper Society Advertising
Conference.
Northcliffe also recognises that advertising supplements and platforms
must appeal to readers. During the year, two new platforms were
launched using quality editorial provided by Associated Newspapers:
thisismoney and thisistravel. They add to readers' enjoyment of
the newspapers and thus the reaction from advertisers has been encouraging.
During 2003, further investments will be made in additional editorial
for the important advertising platforms of jobs, motors and property.
Commercially, greater focus was given to building advertising revenues
on the web. For a relatively modest additional charge, recruitment
advertisers can elect to have their advertisements published on
Northcliffe's network of "thisis" websites. Customers have responded
positively with over 70% of local advertisers opting for this package.
A further development is a joint venture with Associated Newspapers
in establishing "thisisclassifieds", to sell on-line recruitment
listings to recruitment consultancies and specific direct clients.
During the first quarter of the year, Northcliffe's "thisis" internet
sites were re-launched with a new look and feel resulting in increased
usage by their local communities. The number of unique visits doubled
alongside a 50% increase in page impressions. The sites currently
enjoy 400,000 visits per week. Local content on each site enables
the local newspaper to extend its service to readers whilst enticing
non-readers. The websites are complementary to the newspapers and
offer users the facility of sending letters to the editor, voting
on opinion polls and ordering photographs or subscription copies
of the paper on-line. Traffic is driven through joint campaigns
and promotions with the newspapers. Much has been achieved in 2002
whilst at the same time reducing the cost of running the internet
operation by around 35%.
Contract printing profits fell in 2002 as other large publishers
of regional newspapers withdrew work from some of Northcliffe's
presses so as to fill their own spare capacity. This resulted in
the decision to rationalise production capacity by closing the ageing
press in Chelmsford in October 2002 and reducing Lincoln to one
shift from December 2002. All of the work from these presses has
been accommodated at other Northcliffe sites. Closure costs were
provided in the 2002 results. Despite this loss of third party printing,
Northcliffe's presses continue to be heavily utilised. Production
quality and service remain paramount. IFRA Colour Club membership,
acknowledging exceptional printing standards, has been awarded to
Plymouth and Exeter, the only regional printers in the country to
be so recognised. Service standards for Northcliffe's own publications
have improved resulting in newspapers being delivered consistently
on time to readers. This contributes to the drive to improve circulation.
The project to provide enhanced capacity at Stoke and Derby for
DMGT's national titles is slightly ahead of schedule and on budget.
These presses will come on line progressively from January 2003.
Readers and advertisers of the Stoke Sentinel and the Derby Evening
Telegraph will also benefit from access to more colour. Projects
to add colour capacity, to meet advertising demands in Aberdeen
and Swansea, are also on target for completion by the end of December
2002.
At the end of July, one of Northcliffe's titles, the Sentinel, which
serves the community of Stoke on Trent, acquired the Leek Post and
Times for just over £6 million. This acquisition will be earnings'
enhancing from 2003. In Hungary, the group's two regional daily
newspapers and three "Loot-type" classified publications all performed
strongly in 2002. Profits were ahead of the previous year by over
50%. Northcliffe continues to look for suitable acquisition opportunities
in the area.
The start to the new financial year has so far been encouraging.
Circulation trends continue to improve despite recent price increases
on seven daily titles. Advertising revenues are up 6% with all categories,
except retail, showing growth.
| Northcliffe Daily Newspaper Centres |
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Aberdeen
Bath
Bristol
Cheltenham
Derby
Exeter |
Gloucester
Grimsby
Hull
Leicester
Lincoln
Nottingham |
Plymouth
Scunthorpe
Stoke
Swansea
Torquay |
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