Northcliffe produced record results. Circulation revenues were up 4%, advertising revenues grew by 3% and adjusted operating profits advanced by 4%. Most of Northcliffe’s publishing centres produced year on year profit growth, with particularly notable performances from titles in Plymouth, Exeter, Torquay, Cornwall, Humberside and the Midlands. Bristol and Aberdeen continued to face difficult market conditions, particularly in recruitment advertising.
A number of daily titles raised cover prices following a period of sustained investment in higher paginations and added-value supplements. Northcliffe’s seventeen evening and three morning titles modestly outperformed the local and regional newspaper industry ABC average for January to June 2003 with circulation drops of 3.3% and 2.6% respectively. In part, this sales decline was as a consequence of the continuing drive to reduce bulk sales – an objective shared by the entire regional press. Almost all of Northcliffe’s daily titles now report “actively purchased” sales of between 98% and 100%. Its 23 weekly titles delivered another strong sales performance with 16 showing increases in the January to June period.
Stabilising circulation of the group’s daily titles continues to be a priority. Last year a programme of further investment in editorial, marketing and circulation was initiated. All of this remains in place and will be supplemented by further properly researched improvements as Northcliffe seeks to ensure that all publications are relevant to readers’ needs, as well as representing good value for money. In addition to specific investments in individual titles over the next 12 months, a general overhaul of fundamental but essential circulation building blocks such as distribution, canvassing and home delivery has begun.
Advertising revenue growth was driven by property and recruitment, with an especially strong performance from property, which grew 13%. Additional colour printing capacity in the Midlands also contributed by allowing certain titles to satisfy the demand from estate agents for more colour pages. The weekly property guides in Hull, Plymouth, Exeter and Torquay are no longer printed on their local presses but in the Midlands. All now offer every page in full colour. Recruitment advertising bounced back with growth of 4% following a decline of 3% in the previous year. Motors and Retail advertising each declined by 1%.
Over the last two years, Northcliffe has added further resources to its national advertising operation to enable better representation at agency and client level and to improve customer service. National revenues generated by this sales team increased by 9% with many new clients being added to the existing client base.
On-line advertising has also improved over the last 12 months. Locally, over 80% of all recruitment advertising appearing in print is sold on to the job channels of our local portals and Fish4 – the national website.
Contract printing profits fell further. The market for printing third party weekly titles reduced again as the other major regional publishers take advantage of more printing capacity by transferring work in-house. Nevertheless, Northcliffe’s presses are busier than ever. Internal demand for pre-printed supplements has grown as publishers introduce more relevant content for readers, as well as devising new platforms for advertisers. National titles are printed at seven of Northcliffe’s 12 printing centres.
During 2003 the contract to print titles for News International at three sites was extended for a further three years. In addition, a contract was signed to print copies of the Daily Star in Swansea.
The investment to enhance capacity at Stoke and Derby for Associated’s national titles is almost complete, slightly ahead of schedule and on budget. Copies of the Daily Mail and The Mail on Sunday, previously printed at Bradford, are now produced on Northcliffe presses. Extra colour capacity was added in Aberdeen and Swansea. A twelve-month project to increase colour capacity in Plymouth to meet demand from the weekly titles in Cornwall and Devon and the four daily Westcountry titles will start in January 2004 and will cost £6 million.
The Hungarian business had another record year. Adjusted operating profits grew by 18% due to buoyant advertising revenues and a strong performance from contract printing. One small acquisition was made in 2003, Szuperinfó, a free distribution, advertising-only publication for the town of Sopron.
Particular attention remains on staff training and development. An extensive management development programme, which involves managers at every level, is now in place. Employee training and development is better co-ordinated across the group as new minimum standards are introduced and best practice shared. This, allied to a comprehensive series of benefits, over and above basic salaries, has contributed to a further fall in staff turnover, which has reduced by 5% over the last two years.
The new financial year has started well. Advertising revenues are up 6%, giving cause for cautious optimism as Northcliffe focuses on what it does best – providing readers with relevant, essential and entertaining local information and, equally importantly, connecting advertisers with their customers.