INTERIM MANAGEMENT STATEMENT
17 weeks ended
· While growth in Publishing digital revenue remains strong, print revenue trends have slowed resulting in a 5% decline in Group revenue over the period, compared to a 2% decline in the first half.
· Publishing digital revenue grew by 44% in the period with growth of 100% in average monthly unique users1 to over 85 million and growth of 93% in average monthly page views1 to over 575 million.
· Strong operating cash flows coupled with the benefit of dividends from the
· The Board anticipates the reinstatement of dividends for this year with a final dividend for 2014 of
· Profit for 2014 is expected to be in line with our previous expectations.
As previously highlighted, we continue to experience month on month volatility in print revenues, in particular within national advertising revenues where trends have deteriorated relative to the first half. We expect this trend to continue for the remainder of the year.
Continued momentum on our strategic initiatives coupled with ongoing cost mitigation and an increase in structural costs savings to at least
Commenting on the trading for the period,
"I am pleased with the strategic progress we are making in building the scale and reach of our digital brands. At the end of September our group digital audience exceeded 90 million monthly unique users with continued strong growth in digital revenue. Despite the recent deterioration in national press advertising trends I remain confident that our strategic initiatives will ultimately deliver sustainable growth in revenues and profits."
1Average monthly unique users and page views for the Publishing Division across web, mobile and apps for July to
2Assuming that the private placement loan notes and related cross-currency interest rate swaps are not terminated prior to their maturity
Publishing revenue declines increased during the period with print revenue declining by 7% partially mitigated by continued strong growth in digital revenue of 44%.
Circulation revenue fell by 3% for the period with cover price increases substantively offsetting volume declines. The rate of revenue decline is higher than the 1% decline in the first half due, in part, to the timing of cover price increases.
Publishing print advertising revenue deteriorated with a decline of 12% for the period compared to a decline of 9% for the first half driven by weaker national display advertising, in particular supermarket spending.
The increase in digital audience contributed to Publishing digital revenue growing by 44% during the period driven by advertising and other revenue growth of 46% and 33% respectively.
The 6% decline in printing revenue predominantly reflects the impact of a fall in newsprint revenues driven by falling volumes and the impact of lower newsprint prices.
Cash Flow and Financing
Cash flows remained strong which coupled with dividends from associates enabled net debt on a contracted basis to fall by
Due to phasing, capital expenditure for the year is expected to be lower than the previous
The Company continued to deal with and resolve a number of civil claims in relation to phone hacking. During the period a number of claims have been settled and a subsidiary,
There will be a conference call for analysts and shareholders at
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Simon Fox, Chief Executive
Vijay Vaghela, Group Finance Director
020 7293 3553
020 7293 3553
Mike Smith, Partner
Nick Cosgrove, Partner
020 7404 5959
020 7404 5959
Forward looking statements
Statements contained in this Interim Management Statement are based on the knowledge and information available to the Company's directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By their nature, the statements concerning the risks and uncertainties facing the Company in this Interim Management Statement involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this Interim Management Statement contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Company undertakes no obligation to update these forward looking statements.