National World
plc
("National World," the "Company" or the "Group")
Half-year Financial
Report
Results for the 26 weeks
ended 29 June 2024
Highlights
· 17% growth in Group
revenue
· 12% growth in digital
revenue
· Adjusted EBITDA of £5.0
million, in line with expectations
· 61% increase in Adjusted
EBITDA with 2023 acquisitions fully
integrated
· Net cash balance of £13.0
million
· 0.2p maiden interim dividend
declared, payable on 20 September 2024 to shareholders on the
register on 9 August 2024, continuing a progressive
policy
· Full year expectation
unchanged
|
Adjusted
results*^
|
Statutory
results
|
|
H1 24
|
H1 23
|
H1 24
|
H1 23
|
|
£m
|
£m
|
£m
|
£m
|
Revenue
|
48.8
|
41.6
|
48.8
|
41.6
|
EBITDA
|
5.0
|
3.1
|
3.6
|
2.1
|
Operating profit
|
4.7
|
2.9
|
2.2
|
1.4
|
Profit before tax - Continuing
operations
|
4.8
|
3.2
|
2.3
|
1.7
|
Profit before tax - Discontinued
operations
|
0.1
|
-
|
1.1
|
-
|
Earnings per share - basic (pence) -
Continuing operations
|
1.4p
|
0.9p
|
0.4p
|
0.5p
|
Dividend per share (pence)
|
0.2p
|
n/a
|
0.2p
|
n/a
|
* Adjusted results are before
non-recurring items, amortisation of intangible assets and impact
of IFRS16. Note 21 provides a reconciliation between Statutory and
Adjusted results.
^ Unaudited
Commenting on the results, Executive Chairman, David
Montgomery, said:
"The
enhanced performance and significantly increased profits are the
result of expert integration of acquired businesses and also an
energetic restructure of the operating model based around original,
monetisable content, re-skilling of the talent base and greater
engagement with registered customers.
"We are investing in both automated
processes combined with the development of a social media platform
that deepens the relationship with communities and interest groups
to win back key marketplaces.
"At the same time our expert and
specialist content, in areas such as business and sport, is
exploiting a national footprint that in future will be better
represented by the Group to promote data and sales.
"National World is also alive to the
attractiveness of consolidation, extracting immediate significant
synergies and equipping acquired businesses with the innovative
tools to grow exponentially."
· Total revenue up 17%, digital
revenue up 12%, net cash balance of £13.0 million
· Total Revenue up 17% to £48.8
million, with a 19% year-on-year
increase in quarter one, followed by a 16% increase in quarter
two.
· Robust digital revenue
growth, up 12% year-on-year to £10.0
million, bolstered by 2023 acquisitions. The business is
transitioning away from page view (PV) metrics, towards what our
customers and advertisers recognise as higher value content. This
is demonstrated by our 12% increase in digital revenue despite a 4%
decrease in PV, and a 25% increase in video revenue despite a 14%
decrease in video views.
· Events revenues of £2.5
million represent an 92% improvement
year-on-year, benefiting from having
acquired Insider Media on 30 April 2023. 2024 is a transformational
year for our events business with overall revenues expected to
exceed £5.0 million. The Group will run 100 events throughout the
year across the UK and 50 sector specific
networking breakfasts. The sector
specialisms include finance, property, manufacturing, community and
apprenticeships. This business is in a highly rated marketplace and
our 2024 growth makes it a meaningful diversification for the
Group.
· Adjusted EBITDA
of £5.0 million, up 61% and adjusted operating
profit of £4.7 million, up 62%. EBITDA margin has improved to 10%,
a 3 pps improvement on the prior period. Contributing factors to the improved performance are the
benefit from the acquisitions completed in 2023 for which there is not a full
period of comparatives and the Group's accelerated plans, which were delivered in the second half of
2023, to implement the new operating model.
· Acquisitions and
Disposals.
On 31 March 2024 the Group disposed
of Press Computer Systems Limited, ("PCS") to Naviga 1 UK Limited, ("Naviga") which
it had acquired six months earlier as part of the Midland News
Association, ("MNA") acquisition. The Group has recorded a £1.0
million gain on the disposal of PCS in the Statutory Discontinued
Operation results. Consideration of £3.5 million was received in
the form of service credits which the Group will utilise against
the five-year software agreement it has with Naviga. From 1 July
2024 onwards, the Group will benefit from a reduced adjusted
operating cost base and cash out flow, which is expected to benefit
the next four to five years until the £3.5 million service credit
is fully utilised.
The Group has completed two
acquisitions in 2024, with Athletics Weekly acquired on 31 May and
Serious About Rugby League on 8 July, both acquisitions were funded
from existing cash resources. The specialist content sites will
enhance the Group's sports vertical.
· Strong balance sheet with
significant financial flexibility, closing net cash balance
of £13.0 million at 29 June 2024,
with no outstanding debt.
· Dividend.
A maiden interim dividend of 0.2 pence per share
has been approved and declared by the Board and will be paid on 20
September 2024 to shareholders on the register at 9 August
2024.
On 30 May 2024, shareholders
approved the payment of a 0.55
pence per share dividend which was paid on 10
July, in relation to FY23 performance.
Outlook
The Company's primary focus is to
build a sustainable and monetisable content business, embracing its
news provision tradition but with a wider agenda across all
platforms. This pivoting of the business has continued unabated
despite the economic headwinds in the first half.
Revenues in July have increased by
13% year on year. The Company will continue to benefit in the
second half from three key drivers - the acquired businesses, new
launches and relaunches of heritage brands. Tight cost management
remains a critical factor as in the whole sector.
The Board confirms its view that the
business will perform in line with market expectation for the full
year.
Enquiries
National World plc
David Montgomery
c/o Montfort
Communications
|
|
Dowgate Capital Limited - Financial Advisers and
Brokers
David Poutney
James Serjeant
|
+44 (0)20
3903 7715
|
Montfort Communications
Nick Miles
Olly Scott
|
+44 (0)77
3970 1634
+44 (0)78
1234 5205
|
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.
Chairman's statement
National World plc was founded on
the principle that it would consolidate in the news media sector
and innovate in content across all platforms to establish a
sustainable growing business.
The Group delivered a robust growth
performance in H1 2024 in line with both that principle and market
expectations. Adjusted EBITDA for the period was £5.0 million, up
61% year on year and adjusted operating profit was £4.7 million, up
62%, from continuing operations.
Overall revenue was £48.8 million,
an increase of 17% from H1 2023. Revenues improved by 19% in the
first quarter followed by a 16% increase in the second quarter. The
six acquisitions, completed in 2023, contributed £11.8 million of
additional revenue in the first half (H1 2023: £2.0 million) and
are expected to contribute revenue of over £21 million, and EBITDA
of more than £3 million in the full year.
National World has established a
wider and more diverse media portfolio since its first acquisition
in January 2021. Among other considerations the Executive and
Independent Directors consider it is necessary that the Group
presents itself as a unique proposition commercially instead of
being perceived as a regional newspaper group.
National World's content is pivoting
towards topic specialisation distributed across all platforms,
locally, nationally and internationally. Its engagement with its
heritage communities and interest groups is modelled on social
media exchanges underpinned by the reliability and safety of
journalistic curation.
The many and continuing launches of
the World city brands have prevented some of the recent audience
erosion suffered by other news groups due to algorithmic changes by
the platforms, increased activity from the entertainment industry
and unfair competition in local news from the tax funded
BBC.
The focus is increasingly on
original and monetisable content in key sectors with business and
sport now organised in group wide verticals. These and other topics
will also enhance our events coverage which has accelerated since
our acquisition of Insider Media last year.
At the same time local content is
being enriched through greater networking with community groups,
businesses and public institutions. It is National World's
intention to make all local brands uniquely local, banishing
generic content in at least 50 titles by the year end. This - and
the establishment of a local social media platform will give
greater longevity to heritage assets.
Innovation and acquisition
Unlike other heritage news
businesses, National World is combining cost efficiency with
investment in innovation and techniques with current encouraging
trends showing that the Company is well positioned to benefit in
developing areas, such as video and TV production and revenue,
subscriptions and app driven user and advertiser
revenues.
Most importantly, our social media
platform registration wall will help create a local marketplace,
recreating digitally the stronger presence once enjoyed by local
print publishers.
Three components are constantly at
play - acquisitions, consolidation and innovation. A mixture of the
first two is expected to increase revenues overall for the full
year. The net effect of launches and acquisitions this year means a
projected stabilisation of revenue for the first time in many
years.
The innovation involves a change to
the operating model that is focused on automation including the
immediate exploitation of artificial intelligence in production
across both print and digital platforms.
The Executive Directors and
Independent Directors believe that the significant investment is in
the long-term interest of shareholders and also demonstrably
justified by an increase in productivity.
When the Company acquired JPIMedia
Group on 2 January 2021 there were 79 brands reporting £88.2
million revenue supported by 1,465 employees. In 2024, the Group
has over 100 brands, with projected revenue of £100 million
supported by 1,199 staff.
The Group's versatile and
technologically driven infrastructure - plus its many innovative
initiatives - provide shareholders with an unrivalled opportunity
for mergers that could extract value from synergies. Directors
would be derelict not to pursue these consolidation benefits,
cautiously of course, but energetically.
From continuing operations, the
Group delivered a statutory operating profit of £2.2 million, and
statutory earnings per share (basic) for the period were 0.4 pence
per share (2023: 0.5 pence per share). Adjusted earnings per
share (basic) for the period were 1.4 pence per share (2023: 0.9
pence per share), from continuing operations.
Monetisable expert content is
critical to the development of the Group and our talent base is
being reformed and re-skilled to deliver this approach in video,
podcasts, events and now mainstream television.
Key initiatives, both in acquisition
and innovation, so far this year include:
· The
continued development of automation in print publishing that will
be rolled out for the weekly titles during the remainder of the
year with purely local content, thereby increasing value to the
consumer and advertiser;
· The
acquisition of two sports specialist brands, Athletics Weekly and
Serious About Rugby League with a combined total revenue of £0.4
million and expected EBITDA of £0.1 million in 2024;
· The
disposal of Press Computer Systems was completed on 31 March 2024,
which was not core to the National World business;
· The
development of a content team to focus on trending content across
every major UK city;
· The
consolidation of a magazine hub to centrally design our Business
Insider titles in a modern format combined with our high quality
Athletics Weekly magazine; and
· Total
subscribers to National World websites and apps increased
by 8% to 20,877 since year end. The Scotsman, Yorkshire Post,
News Letter, Express and Star and Shropshire Star brands have grown
their subscriber base by 17% since December 2023. Our registration
strategy has seen monthly logged-in visits to our portfolio of
websites increase by 87% since year-end.
All these initiatives help to pivot
the Company towards a premium content business, based on expert
journalism and targeting key topics. A number of potential further
acquisitions have also been identified.
National World's transition has
gained momentum and it is poised to benefit across print, digital
and video platforms in a recovery.
This and recent trends towards a
modest advertising improvement give confidence that the Company can
meet its expectations for the full year.
David Montgomery
Executive Chairman
1 August 2024
Financial review
Income statement
Basis of presentation of
results
The adjusted results are presented
to provide additional clarity and understanding of the Group's
underlying trading. Adjusted results are before the implementation
of IFRS16, the amortisation of intangible assets and non-recurring
items, including restructuring and transaction costs. A
reconciliation between Statutory and Adjusted results is shown in
Note 21.
The results for the period include
Athletics Weekly, acquired on 31 May 2024, and the acquisitions
completed throughout 2023. The prior year comparatives
include Insider Media for 2 months, the Northern Ireland title
acquisitions and Rotherham Advertiser from their respective
acquisition dates. The Midland News Association acquisition
was completed on 29 September 2023 so its results are not included
in the comparatives, and Press Computer Systems ("PCS") also
acquired on 29 September 2023 is now disclosed as discontinued
operations following its disposal on 31 March 2024.
Results for the 26 weeks
ended 29 June 2024
The statutory and adjusted results
have been prepared for the 26 weeks ended 29 June 2024 (2024) and
the comparative period is for the 26 weeks ended 1 July 2023
(2023).
Note 21 sets out the reconciliation
between the statutory and adjusted results.
|
Adjusted
results
|
Statutory
results
|
|
2024
|
2023
|
2024
|
2023
|
Continuing operations
|
£m
|
£m
|
£m
|
£m
|
Revenue
|
48.8
|
41.6
|
48.8
|
41.6
|
Operating Costs
|
(43.8)
|
(38.5)
|
(43.5)
|
(38.3)
|
Depreciation and
Amortisation
|
(0.3)
|
(0.2)
|
(1.4)
|
(0.7)
|
Operating profit pre non-recurring items
|
4.7
|
2.9
|
3.9
|
2.6
|
Non-recurring items:
|
|
|
|
|
Impairment of TNM
|
-
|
-
|
(1.1)
|
-
|
Restructuring costs
|
-
|
-
|
(0.6)
|
(1.0)
|
Transaction costs
|
-
|
-
|
-
|
(0.2)
|
Operating profit
|
4.7
|
2.9
|
2.2
|
1.4
|
Net finance income
|
0.1
|
0.3
|
0.1
|
0.3
|
Profit before tax
|
4.8
|
3.2
|
2.3
|
1.7
|
Tax (charge)
|
(1.2)
|
(0.8)
|
(1.3)
|
(0.4)
|
Profit after tax from continuing operations
|
3.6
|
2.4
|
1.0
|
1.3
|
Discontinued operations
|
|
|
|
|
Profit for the period from
discontinued operations
|
0.1
|
-
|
1.2
|
-
|
Profit for the period from total operations
|
3.7
|
2.4
|
2.2
|
1.3
|
EBITDA - continuing operations
|
5.0
|
3.1
|
3.6
|
2.1
|
|
|
|
|
|
Operating profit margin %
|
10%
|
7%
|
5%
|
3%
|
EBITDA margin %
|
10%
|
7%
|
7%
|
5%
|
|
|
|
|
|
Earnings per share - from continuing and discontinued
operations
|
|
|
|
|
Basic (pence)
|
1.4p
|
0.9p
|
0.8p
|
0.5p
|
Diluted (pence)
|
1.3p
|
0.9p
|
0.8p
|
0.5p
|
Earnings per share - from continuing
operations
|
|
|
|
|
Basic (pence)
|
1.4p
|
0.9p
|
0.4p
|
0.5p
|
Diluted (pence)
|
1.3p
|
0.9p
|
0.4p
|
0.5p
|
|
|
|
|
|
The Group delivered a solid
performance in the first half considering the challenging market
conditions with revenue increasing 17% to £48.8 million (2023:
£41.6 million) and adjusted operating profit increasing to £4.7
million (2023: £2.9 million). Adjusted EBITDA in the period was
£5.0 million (2023: £3.1 million) with the EBITDA margin increasing
by three percentage points to 10% (2023: 7%) with benefit from the
actions taken in late 2023 to implement the new operating model,
and contribution from the acquisitions completed in
2023.
Adjusted finance income was £0.1
million (2023: £0.3 million income). Statutory financing income was
£0.1 million (2023: £0.3 million income) including IFRS16 lease
finance costs of c.£40,000.
Adjusted profit before tax of £4.8
million increased by £1.6 million (2023: £3.2 million), for
continuing operations. Statutory profit before tax was £2.3 million
(2023: £1.7 million) benefiting from the acquisitions completed in
2023 and lower restructuring costs offset by the impairment in The
News Movement ("TNM") of £1.1 million.
For discontinued operations, a
statutory profit of £1.2 million and adjusted profit of £0.1
million is reported in the period from discontinued
operations.
For total operations:
· Statutory earnings per share for the period was 0.8 pence per
share (2023: 0.5 pence per share).
· Adjusted earnings per share for the period was 1.4 pence per
share (2023: 0.9 pence per share).
For continuing operations:
· Statutory earnings per share (basic) for the period was 0.4
pence per share (2023: 0.5 pence per share).
· Adjusted earnings per share (basic) for the period was 1.4
pence per share (2023: 0.9 pence per share).
Revenue
The table below provides a summary
of revenue for the 26 weeks ended 29 June 2024 with the comparative
for the 26 weeks ended 1 July 2023.
|
2024
|
2023
|
Change
|
Change
|
Continuing
operations
|
£m
|
£m
|
£m
|
%
|
Print Publishing Revenue
|
35.4
|
30.4
|
5.0
|
16
|
Advertising
|
17.3
|
14.3
|
3.0
|
21
|
Circulation
|
16.7
|
14.9
|
1.8
|
12
|
Other
|
1.4
|
1.2
|
0.2
|
17
|
Digital Publishing Revenue
|
10.0
|
8.9
|
1.1
|
12
|
Advertising
|
6.2
|
5.6
|
0.6
|
11
|
Subscriptions
|
0.8
|
0.8
|
-
|
-
|
Other
|
3.0
|
2.5
|
0.5
|
20
|
Other Revenue
|
3.4
|
2.3
|
1.1
|
48
|
Events
|
2.5
|
1.3
|
1.2
|
92
|
Editorial funding
|
0.8
|
1.0
|
(0.2)
|
(20)
|
Other
|
0.1
|
-
|
0.1
|
-
|
Total Revenue from continuing operations
|
48.8
|
41.6
|
7.2
|
17
|
Total Revenue from discontinued operations
|
0.7
|
-
|
0.7
|
-
|
Total Revenue from total operations
|
49.5
|
41.6
|
7.9
|
19
|
The revenue environment has remained
challenging with a continued slowdown in the UK economy impacting
consumer confidence, driven by rising inflation and interest
rates. Revenue increase of 17% compared to
H1 2023 reflects a 19% increase in the first quarter and 16% growth
in the second quarter with revenue earned through acquisitions
mitigating against further declines.
Print
revenue
Print revenue comprises all revenue
driven by the local newspaper titles, including all digital revenue
packaged with print.
Print Advertising revenue increased
by 21% year-on-year with an increase of 20% in the first quarter
followed by an increase of 22% in the second quarter, with
additional revenues from the early election contributing to the
stronger performance in Q2.
Circulation revenue increased
by 12% during the period with an improvement of 13%
in the first quarter and 11% in the second quarter. Average
monthly circulation volumes in the period
were 1.7 million for the daily newspapers
and 0.7 million for the weekly newspapers representing
a year on year growth of 13% and a decline of
12% respectively.
Circulation revenue for the daily
titles was consistent across Q1 and Q2 at +13%, while weeklies saw
a decline of 14% in Q2 compared to -9% in Q1. Titles acquired since
January 2023 contributed £3.2 million revenue to the first
half, an increase of £2.9 million compared to the prior
period.
Free distribution increased by 159%
year-on-year, due to the acquisition of the Dearne Valley Weekender
in May 2023, and MNA titles in October 2023.
Magazines distribution in H1 2024
totalled 0.4 million copies including Insider Media, MNA and
Athletics Weekly acquisitions, compared to 0.1 million copies in
the same period last year.
Circulation revenues includes print
subscription revenue of £1.5 million, a 2% decline
year-on-year which is significantly lower than the overall
circulation revenue decline of 8%, excluding the benefit of
acquisitions.
Other print revenue, which includes
syndication, leaflets, events ticket sales and other sundry
revenues grew by 17% bolstered by the acquisition of Insider
Media.
Digital
revenue
Digital revenue comprises all
revenue sold programmatically, digital-led direct sales,
subscriptions, syndication and revenue generated from
Google.
Digital revenue increased by 12% in
the period, delivering a strong first half with growth of 12% in Q1
followed by 13% in Q2. This is despite continued volatility in
audience, with average monthly page views
of 136 million in the first half, a year-on-year decline of 4%,
with -8% in Q1 improving to +1% in Q2.
Digital advertising revenue
increased by 11%, with a strong first quarter performance recording
growth of 9% increasing to 12% in the second quarter. Advertising
revenue is predominantly driven by audience with the Group
averaging monthly Pages Views (PVs) of 136 million, -4%
year-on-year and video advertising
continuing to increase with 14% growth year-on-year.
Total video views were 178 million in the first
half, a 14% decline year-on-year, for owned and operated video
views. Video views have declined as a result of changing balance of
page views and reduced distribution to syndicated
networks.
Digital subscription revenue
remained flat at £0.8 million revenue, with growth of 5% in Q2,
following a decline of 4% in Q1. Total subscribers
to National World websites and apps increased by 8% to 20,877
since year end. Subscribers to the Scotsman, Yorkshire Post, News
Letter, Express and Star and Shropshire Star brands has grown by
17% since December. Our registration strategy has seen monthly
logged-in visits to our portfolio of websites increase by 87% since
year-end.
Other digital revenue grew by 20%,
due to contributions from acquisitions. Other digital revenues
includes contracts for Google content, Digital marketing services
and Syndication.
Other
revenue
Editorial funding reflects grants
from the BBC for local democracy reporters and from Meta for the
funding of 57 journalists, 21 by Meta and 36 by BBC (2023: 60
journalists).
Events revenue grew 92% reflecting
the contribution from Insider Media Limited acquired on 30 April
2023.
Other revenue includes outsourcing
revenue generated by MNA.
Discontinued operations revenue of £0.7 million relates to PCS which was disposed of 31 March
2024.
Operating Costs
Operating costs comprise:
|
Adjusted
results
|
Statutory
results
|
|
2024
|
2023
|
2024
|
2023
|
Continuing operations
|
£m
|
£m
|
£m
|
£m
|
Labour
|
24.2
|
21.3
|
24.2
|
21.3
|
Newsprint and production
costs
|
6.6
|
6.4
|
6.6
|
6.4
|
Depreciation and
amortisation
|
0.3
|
0.2
|
1.4
|
0.7
|
Other
|
13.0
|
10.8
|
12.7
|
10.6
|
Total operating cost before non-recurring
items
|
44.1
|
38.7
|
44.9
|
39.0
|
Non-recurring items from continuing
operations
|
-
|
-
|
1.7
|
1.2
|
Total operating costs from continuing
operations
|
44.1
|
38.7
|
46.6
|
40.2
|
Total operating costs from
discontinued operations
|
0.6
|
-
|
0.6
|
-
|
Non-recurring items from discontinued
operations
|
-
|
-
|
(1.0)
|
-
|
Total operating costs from discontinued
operations
|
0.6
|
-
|
(0.4)
|
-
|
Total operating costs from total operations
|
44.7
|
38.7
|
46.2
|
40.2
|
|
|
|
|
| |
Continuing operations Statutory
operating costs increased by £5.4 million to £45.6 million (2023:
£40.2 million) and increased by £5.4 million on an adjusted basis
to £44.1 million (2023: £38.7 million).
Adjusted costs are before
non-recurring items, amortisation of intangible assets and impact
of IFRS16.
The increase in costs can be
attributed to the larger acquisitions, with Insider Media and MNA
acquired in April and September 2023 respectively and therefore not
fully included in the comparatives. This increase is offset by cost
saving actions taken across the Group, largely delivered in H2
2023.
Labour
The Group employed an average of
1,174 employees during the period (2023: 1,110). The increase in
resource can be attributed to the acquisitions, offset by
leavers.
Newsprint and Production
costs
Newsprint costs have declined by
-26% overall, excluding the impact of the acquisitions this is a
reduction of 41%, reflecting declining circulation volumes, and a
reduction in the price of newsprint by 31%. Production costs
have increased by 20% over the period, driven by acquisitions,
offset by reduced printing volumes and a new printing contract
which commenced Q4 2023. Excluding the impact of acquisitions
production costs have reduced by 12%.
Depreciation and
amortisation
Adjusted depreciation and
amortisation, which excludes amortisation of intangible assets and
depreciation on Right of Use assets, is £0.3 million (2023: £0.2
million). For the full year, capital expenditure of c.£2.0 million
is expected.
Statutory depreciation and
amortisation increased by £0.7 million to £1.4 million (2023: £0.7
million) with the increase due to acquired intangible, tangible and
Right of Use assets, and digital development projects.
Other
Other costs
comprise property, IT, digital product and engineering,
administration and other operating costs. Adjusted other costs
increased by £2.2 million to £13.0 million, with the increase
attributed to the acquired businesses, digital and IT investment,
and other inflationary increases.
Non-recurring
items
Within the continuing operations,
total non-recurring costs of £1.7 million were incurred in the
period (2023: £1.2 million), which includes:
· £1.1
million impairment of the investment in TNM, which was determined
by the Directors.
· £0.6
million restructuring costs (2023: £1.0 million) for the delivery
of cost reduction measures, which will generate in-year savings of
£0.5 million and annualised savings of £0.9 million.
Discontinued operations generated a
statutory profit after tax of £1.2 million, including a £1.0
million gain on sale of PCS.
Finance income and
charges
Financing (income) and charges on a
statutory and adjusted basis are:
|
Adjusted
results
|
Statutory
results
|
|
2024
|
2023
|
2024
|
2023
|
Continuing operations
|
£m
|
£m
|
£m
|
£m
|
Interest income
|
(0.1)
|
(0.4)
|
(0.1)
|
(0.4)
|
Interest on unsecured loan
notes
|
-
|
0.1
|
-
|
0.1
|
Interest on lease
liabilities
|
-
|
-
|
-
|
-
|
Total financing (income)/charge from continuing
operations
|
(0.1)
|
(0.3)
|
(0.1)
|
(0.3)
|
Total financing (income)/charge from
discontinued operations
|
-
|
-
|
-
|
-
|
Total financing (income)/charge
|
(0.1)
|
(0.3)
|
(0.1)
|
(0.3)
|
Net adjusted financing income
include £0.1 million interest income earned from cash held on
deposits with Barclays Bank and Lloyds Bank (2023: £0.4
million).
The unsecured loan notes were repaid
in December 2023, therefore the interest expense is £nil million in
the period (2023: £0.1 million).
Statutory finance expense includes
£nil million interest charge on IFRS16 lease liabilities (2023:
£nil million).
Profit before
tax
Statutory profit before tax for
continuing operations of £2.3 million (2023: £1.7 million) is after
£1.7 million non-recurring costs (2023: £1.2 million).
Adjusted profit before tax of £4.8
million (2023: £3.2 million) is before non-recurring items, the
impact of IFRS16 and amortisation of intangible assets. The
increase in profit before tax is due to a 17% increase in revenue
offset by operating costs 14% higher than the
comparative.
Statutory tax charge and
effective tax rate
The statutory tax rate for the
period is 25%. In continuing operations, a statutory tax charge of
£1.3 million is recognised in the period (56% effective tax rate),
comprising £0.1 million current tax charge, and £1.2 million
deferred tax charge. The difference to the standard rate of tax of
25% is due to disallowed expenses including the TNM investment
impairment of £1.1 million and group relieving brought forward
losses to offset gains in Discontinued operations.
The adjusted profit before tax is
£4.8 million, and the adjusted tax rate is 25% with an adjusted tax
charge in the period of £1.2 million (2023: £0.8 million). The
adjusted tax charge provides a more meaningful and comparable
financial result.
At the period-end the Group has
total tax losses carried forward of £13.4 million recognised as a
deferred tax asset (30 December 2023: £17.9 million, 1 July 2023:
£17.8 million), calculated using a corporate tax rate of 25%. The
Group expects the losses will be utilised over the next three
years.
Earnings per share
(basic)
|
29 Jun 2024
|
1 Jul 2023
|
30 Dec 2023
|
|
p
|
p
|
p
|
Continued operations
|
|
|
|
Statutory earnings
|
0.4
|
0.5
|
1.0
|
Adjusted earnings
|
1.4
|
0.9
|
2.8
|
Discontinued operations
|
|
|
|
Statutory earnings
|
0.4
|
-
|
-
|
Adjusted earnings
|
-
|
-
|
-
|
Total operations
|
|
|
|
Statutory earnings
|
0.8
|
0.5
|
1.0
|
Adjusted earnings
|
1.4
|
0.9
|
2.8
|
Balance sheet
|
|
29 Jun 2024
|
30 Dec 2023
|
|
|
£m
|
£m
|
Non-current assets
|
|
30.6
|
30.4
|
Current assets
|
|
29.2
|
26.0
|
Assets held for sale
|
|
-
|
1.0
|
Total assets
|
|
59.8
|
57.4
|
|
|
|
|
Current liabilities
|
|
(22.9)
|
(21.6)
|
Non-current liabilities
|
|
(0.5)
|
(0.2)
|
Liabilities held for sale
|
|
-
|
(0.1)
|
Total liabilities
|
|
(23.4)
|
(21.9)
|
|
|
|
|
Net
assets
|
|
36.4
|
35.5
|
Net assets of £36.4 million have
increased by £0.9 million compared to the net assets reported at
the year-end. The movement includes the £2.2 million statutory
profit after tax for the period from total operations and the £0.2
million long term incentive share based payment charge offset by
the dividend declared in the period of £1.5 million relating to the
FY2023 performance.
Non-current
assets
Non-current assets are in line with
last year and reflect the £1.1 million impairment of the TNM
investment, £0.8 million reduction in deferred tax asset, offset by
£1.9 million PCS disposal deferred consideration recognised and
intangible assets increasing by £0.3 million due to digital
development projects, the acquisition of the Athletics Weekly net
of amortisation charges.
The deferred consideration totalling
£3.5 million deferred consideration has
been recognised at fair value when the business was sold, and
discounted to £2.2 million (£0.3 million recognised as current, and
£1.9 million non-current assets). From 1 July 2024 the Group will
benefit from utilising the £3.5 million service credit from the
sale of PCS, that will reduce its operating costs and cash out
flows over the next 4-5 years.
Current
assets
Cash and cash equivalents of £13.0
million increased by £2.3 million in the period. There were a
number of significant one-off cash outflows in the period,
including the payment of restructuring costs totalling £1.2 million
and the payment of incomplete transaction costs of £0.8 million
both accrued at the year-end.
Current
liabilities
Trade and other payables of £21.9
million (2023: £19.9 million) increased by £2.0 million in the
period driven by the £1.5 million accrual for the FY23 dividend,
which was approved at the 31 May 2024 AGM and paid to shareholders
on 10 July 2024.
Current provisions decreased by £0.2
million to £0.7 million as £0.1 million was utilised in the period
for property rationalisation in the period and £0.1 million for
dilapidation provision utilisation.
Non-current
liabilities
Right of Use lease liabilities have
increased by £0.3 million to £0.5 million due to the new Manchester
office lease.
Key
Performance Indicators
To monitor progress against the
Group's strategy the Board set four Key Performance Indicators
("KPIs"), for 2024, and performance against these for the first
half is set out below:
●
Digital
audience: Grow digital audience (page views) with a
target of c.150 million average monthly page views in
2024.
The Group report average monthly
page views of 136 million in the
first half, a 4%
year-on-year decline. In the first half,
page views were -8%, improving to a flat performance in Q2. The
Group have proactively implemented a range of initiatives to
improve page view performance in the second half.
The business is transitioning away from page view
(PV) metrics, towards what our customers and advertisers recognise
as higher value content. This is demonstrated by our 12% increase
in digital revenue despite a 4% decrease in PV, and a 25% increase
in video revenue despite a 24% decrease in video views.
●
Revenue
trends: Improve revenue trends with
KPIs that monitor a transition from dependency on print sales to an
accelerating digital performance.
The Group is strategically focused
on ensuring a diverse revenue base, and has reported strong revenue
growth in H1 2024, bolstered by the acquisitions which were not in
the comparative period, due to their varying completion dates. All
revenue categories report year-on-year growth with the exception of
editorial funding revenue. Growth in digital revenue was achieved
despite lower audience and video views. Digital revenue represented
20% of Group revenue, compared to 21% reported in the comparative
period.
●
EBITDA margin in 2024 to exceed
10.7% reported in 2023.
For H1 2024, the Adjusted EBITDA
margin of 10.3%, finishing 3 percentage points higher than the
comparative period. The Group reported an Adjusted EBITDA margin of
10.7% in 2023, and has targeted to improve this for 2024 in the
full year results.
●
Strong cash
generation to provide financial
flexibility and headroom for investment.
The Group's net cash balance
increased by £2.3 million from £10.7 million to £13.0
million.
Key metrics for monitoring
financial flexibility are EBITDA margin and financial headroom. The
Group is targeting an improved adjusted EBITDA margin, in excess of
10.7% reported in 2023.
The intention is to have undrawn
committed facilities and cash balances of 5% of turnover per annum.
The Group has £13.0 million of cash at the end of the period, after
paying remaining liabilities for redundancy and professional fees
totalling £2.0 million that were accrued at the
year-end.
The Group has paid a final dividend
of 0.55 pence per share to shareholders on 10 July 2024, in
relation to FY2023 performance following its approval at the 30 May
2024 Annual General Meeting ("AGM").
A maiden interim dividend of 0.2
pence per share has been approved and declared by the Board and
will be paid on 20 September 2024 to shareholders on the register
at 9 August 2024. The Board continues
to adopt a progressive dividend policy.
Cash
flow
|
Adjusted
|
Statutory
|
|
H1 2024
|
H1 2023
|
H1 2024
|
H1 2023
|
|
£m
|
£m
|
£m
|
£m
|
Operating profit for the period
|
4.7
|
2.9
|
2.2
|
1.4
|
Depreciation and amortisation
charges
|
0.3
|
0.2
|
1.4
|
0.7
|
Impairment of TNM
|
-
|
-
|
1.1
|
-
|
Restructuring costs paid
|
(1.6)
|
(1.4)
|
-
|
-
|
Long term incentive plan
expense
|
-
|
0.1
|
0.2
|
0.1
|
Change in provisions
|
-
|
-
|
(0.2)
|
(0.3)
|
Changes in working capital
|
0.1
|
(1.8)
|
0.2
|
(1.6)
|
Net
cash inflow from operating activities
|
3.5
|
0.0
|
4.9
|
0.3
|
|
|
|
|
|
Net
cash outflow from investing activities
|
(1.2)
|
(4.8)
|
(2.2)
|
(4.8)
|
|
|
|
|
|
Financing activities
|
|
|
|
|
Interest paid
|
-
|
(0.1)
|
-
|
(0.1)
|
Principal repayment of
leases
|
-
|
-
|
(0.4)
|
(0.3)
|
Net
cash generated from financing activities
|
-
|
(0.1)
|
(0.4)
|
(0.4)
|
Net increase/(decrease) in cash and
cash equivalents
|
2.3
|
(4.9)
|
2.3
|
(4.9)
|
Cash and cash equivalents at the
beginning of the period
|
10.7
|
27.0
|
10.7
|
27.0
|
Cash
and cash equivalents at the end of the period
|
13.0
|
22.1
|
13.0
|
22.1
|
At the period-end the Group
maintains a substantial cash balance held of £13.0 million (2023:
£22.1 million) and retains financial flexibility. Cash increased by
£2.3 million since the year-end, despite some notable cash outflows
in the first half including payment of £0.8 million of transaction
costs, and £1.2 million restructuring costs paid in relation to
2023 accruals.
Adjusted cash inflow from operating
activities of £3.5 million is after £1.6 million of restructuring
costs paid of which £1.2 million were expensed to the 2023 Income
Statement.
The conversion of adjusted operating
profit of £4.7 million into cash is 106% (£5.0 million comprising
cash inflow from operating activities before restructuring cost
paid, and after purchases of tangible assets).
Capital Expenditure
Capital expenditure during the
period includes £0.8 million of digital development project costs
and £0.2 million expenditure on IT equipment, predominantly laptops
and IT infrastructure, and £0.2 million for the acquisition of
Athletics Weekly publishing title. For FY 2024, capital expenditure
is expected to be c.£2.0 million including digital development
costs and certain systems and IT equipment requiring replacement as
it approaches the end of its useful life.
Dividends
Shareholders approved the Group's
dividend at the 30 May 2024 AGM of 0.55 pence per share. This was
paid on 10 July 2024 to shareholders on the register at 7 June
2024, and is held as a liability at the period-end.
A maiden interim dividend of 0.2
pence per share has been approved and declared by the Board and
will be paid on 20 September 2024 to shareholders on the register
at 9 August 2024. The dividend reflects the Board's confidence in the ongoing
strong cash generation of the business, the future prospects of the
Group and its strong balance sheet. The Board continues to adopt a
progressive dividend policy.
The Board is committed to provide
strong returns to shareholders through a combination of share price
growth and income. To ensure the Group maintains financial
flexibility and an appropriate level of financial headroom for
investment and working capital, dividend payments will be aligned
to the free cash generation of the business. The free cash
generation for the purposes of assessing the dividend will be the
net cash flow generated by the Group before the repayment of debt,
dividend payments and other capital returns to
shareholders.
Outlook
The Company's primary focus is to
build a sustainable and monetisable content business, embracing its
news provision tradition but with a wider agenda across all
platforms. This pivoting of the business has continued unabated
despite the economic headwinds in the first half.
Revenues in July have increased by
13% year on year. The Company will continue to benefit in the
second half from three key drivers - the acquired businesses, new
launches and relaunches of heritage brands. Tight cost management
remains a critical factor as in the whole sector.
The Board confirms its view that the
business will perform in line with market expectation for the full
year.
Other items
Principal risks and
uncertainties
The Group's principal risks and
uncertainties, which could impact the Group, are identified on
pages 34 to 36 of National World plc's Annual Report for the period
ended 30 December 2023 which is available on the Company's website.
These risks are as follows: strategy, cyber security and data
migration, infrastructure and operations, data protection and
people.
The Directors have reviewed these
principal risks and uncertainties, and do not consider that the
principal risk and uncertainties have changed since the publication
of the annual report for the period ended 30 December 2023.
However, the Board notes that the increased economic uncertainty
and inflationary pressures are being considered to ensure the Group
can meet its strategic objectives.
Going concern
statement
The Directors assessed the Group's
prospects, both as a going concern and its long-term viability, at
the time of the approval of National World plc's Annual Report for
the period ended 30 December 2023 and again when approving National
World plc's Half-yearly Financial Report for the 26 week period
ended 29 June 2024. Further information is set out in the 2023
Annual Report of National World plc.
The Directors consider it
appropriate to adopt the going concern basis of accounting in the
preparation of the Group's interim consolidated financial accounts.
The assessment was based on review of the remaining term of the
three year projections for the business which are considered by the
Board when approving the budget, and reforecast, for 2024.
Management believe that a longer term assessment is not appropriate
given the ongoing structural challenges facing print media and
changing landscape for digital. Key considerations in the
assessment were:
·
Decline in newspapers revenue;
· The
ongoing impact of the macroeconomic conditions on
revenue;
· Management's ongoing mitigating actions in place to manage
costs and cash flow;
· Capital expenditure requirements, including ongoing
maintenance capital expenditure requirements; and
· Investment in digital resource and development.
Sensitivity analysis was applied to
the projections to determine the potential effects should the
principal risks and uncertainties occur, individually or in
combination. The Board also assessed the likely effectiveness of
any proposed mitigating actions.
Whilst the Group strategy is to grow
through acquisition and organic development, no acquisitions have
been assumed in the projections as there is no certainty that
acquisition/s will be concluded. Prior to proceeding with any
acquisition, the three year projections will be updated to ensure
there is no adverse impact on the Group prospects or going concern
resulting from an acquisition.
Having considered the factors
impacting the Group's businesses, including downside sensitivities,
the £13.0 million cash held as at 29 June 2024, the Directors are
satisfied that the Group will be able to operate with sufficient
financial flexibility and headroom for the 12 months from the date
of signing the financial statements.
The Directors have a reasonable
expectation that the Company and the Group will be able to continue
in operation and meet its liabilities as they fall due over the
period of their assessment.
Viability
statement
The Directors have a reasonable
expectation that the Company and the Group will be able to continue
in operation and meet its liabilities as they fall due over the
period of their assessment. The Directors assessed the prospects of
the Group over a three year period which reflects actual trading
for the first six months of 2023 and projections for the remainder
of 2023, 2024 and 2025 in line with the planning cycle adopted by
the Group. A three year period is adopted as it enables the
Directors to consider the impact of declining print revenues,
investment to drive growth in digital and ongoing restructuring
costs required to support profits and cash flow. The assessment
considers the Group's current financial position and the principal
risks and uncertainties facing the Group including those that would
threaten the business model, future performance, solvency or
liquidity.
Sensitivity analysis is applied to
the projections to determine the potential effects should the
principal risks and uncertainties occur, individually or in
combination. The Board also assessed the likely effectiveness of
any proposed mitigating actions.
Whilst the Group strategy is to grow
through acquisition and organic development, aside from the
acquisition completed in the first half of 2023, no other
acquisitions have been assumed in the projections as there is no
certainty that acquisitions will be concluded. Prior to proceeding
with any material acquisition, the three year projections will be
updated to ensure there is no adverse impact on the Group prospects
or going concern resulting from an acquisition.
It is understood that such future
assessments are subject to a level of uncertainty that increases
with time and, therefore, future outcomes cannot be guaranteed or
predicted with certainty. Also, this assessment was made
recognising the principal risks and uncertainties that could have
an impact on the future performance of the Group and the financial
risks described in the notes to the Group's annual consolidated
financial statements.
Board
changes
Andrea Davies was appointed to the
Board, as a Non-Executive Director, on 22 April 2024. She was
appointed as Chair of the Remuneration Committee following the
resignation of Daniel Cammiade (Danny) effective 1 July 2024, who
had served on the Board for a 3 year term. On behalf of the Board I
thank Danny for his contribution.
Statement of Directors'
responsibilities
The Directors are responsible for
preparing the half-yearly financial report in accordance with
applicable laws and regulations.
The Directors confirm to the best of
their knowledge:
a) The interim
consolidated financial statements have been prepared in accordance
with International Accounting Standard 34 'Interim Financial
Reporting', as adopted by the United Kingdom; and
b) The Management Report
includes a fair review of the development and performance of the
business and the position of the Company and the undertakings
included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties they
face.
On behalf of the Board
Sheree Manning
Chief Financial Officer
1 August 2024
Condensed consolidated income statement
for the 26 weeks ended 29 June 2024
(26 weeks ended 1 July 2023 and the 52 weeks ended 30 December
2023)
|
|
26 weeks ended
29 Jun 24
|
26 weeks ended
1 Jul 23
|
52 weeks* ended
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(adjusted)
|
|
Notes
|
£m
|
£m
|
£m
|
Continuing operations
|
|
|
|
|
Revenue
|
5
|
48.8
|
41.6
|
88.0
|
Cost of sales
|
|
(35.3)
|
(31.5)
|
(63.7)
|
Gross profit
|
|
13.5
|
10.1
|
24.3
|
|
|
|
|
|
Operating expenses before
non-recurring items
|
|
(9.6)
|
(7.5)
|
(16.3)
|
|
|
|
|
|
Non-recurring items:
|
6
|
|
|
|
Impairment of TNM
|
|
(1.1)
|
-
|
-
|
Restructuring and redundancy
costs
|
|
(0.6)
|
(1.0)
|
(3.6)
|
Transaction costs
|
|
-
|
(0.2)
|
(1.6)
|
Onerous property costs
|
|
-
|
-
|
(0.1)
|
ROUA impairment
|
|
-
|
-
|
(0.1)
|
Total operating expenses
|
|
(11.3)
|
(8.7)
|
(21.7)
|
Operating profit
|
|
2.2
|
1.4
|
2.6
|
Financing
|
|
|
|
|
Finance costs
|
7
|
-
|
(0.1)
|
(0.2)
|
Interest income
|
8
|
0.1
|
0.4
|
0.7
|
Net
finance income
|
|
0.1
|
0.3
|
0.5
|
Profit before tax
|
|
2.3
|
1.7
|
3.1
|
Tax charge
|
9
|
(1.3)
|
(0.4)
|
(0.4)
|
Profit after tax from continuing operations
|
|
1.0
|
1.3
|
2.7
|
Profit for the year from discontinued
operations
|
|
1.2
|
-
|
-
|
Profit for the period from total operations
|
|
2.2
|
1.3
|
2.7
|
|
|
|
|
|
Earnings per share from continuing
operations
|
|
|
|
|
Basic
|
10
|
0.4p
|
0.5p
|
1.0p
|
Diluted
|
10
|
0.4p
|
0.5p
|
1.0p
|
Earnings per share from discontinued
operations
|
|
|
|
|
Basic
|
10
|
0.4p
|
-
|
-
|
Diluted
|
10
|
0.4p
|
-
|
-
|
Earnings per share from continuing and discontinued
operations
|
|
|
|
|
Basic
|
10
|
0.8p
|
0.5p
|
1.0p
|
Diluted
|
10
|
0.8p
|
0.5p
|
1.0p
|
|
|
|
|
|
*52 weeks ended 30 Dec 23 audited
consolidated income statement has been restated above due to
classification of PCS revenue and costs as discontinued operations,
see Note 19.
Note 10 sets out the calculation of
adjusted earnings per share and Note 21 presents a reconciliation
between the statutory and adjusted results.
Condensed consolidated statement of comprehensive
income
for the 26 weeks ended 29 June 2024
(26 weeks ended 1 July 2023 and the 52 weeks ended 30 December
2023)
|
|
26 weeks ended
29 Jun 24
|
26 weeks ended
1 Jul 23
|
52 weeks ended
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(adjusted)
|
|
|
£m
|
£m
|
£m
|
Profit for the period from continued
operations
|
|
1.0
|
1.3
|
2.7
|
Profit for the period from
discontinued operations
|
|
1.2
|
-
|
-
|
Total other comprehensive profit for the
period
|
|
-
|
-
|
-
|
|
|
|
|
|
Total comprehensive profit for the
period
|
2.2
|
1.3
|
2.7
|
|
|
|
|
| |
*52 weeks ended 30 Dec 23 audited
consolidated income statement has been restated above due to
classification of PCS revenue and costs as discontinued operations,
see Note 19.
Condensed consolidated statement of financial
position
At 29 June 2024
|
|
As at
29 Jun 24
|
As at
1 Jul 23
|
As at
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
Notes
|
£m
|
£m
|
£m
|
Non-current assets
|
|
|
|
|
Goodwill
|
|
13.3
|
7.9
|
13.3
|
Intangible assets
|
11
|
11.9
|
5.7
|
11.6
|
Tangible assets
|
12
|
1.0
|
1.0
|
1.1
|
Investments
|
13
|
-
|
1.1
|
1.1
|
Right of use assets
|
14
|
0.8
|
0.6
|
0.8
|
Deferred consideration
|
19
|
1.9
|
-
|
-
|
Deferred tax
|
|
1.7
|
4.0
|
2.5
|
|
|
30.6
|
20.3
|
30.4
|
Current assets
|
|
|
|
|
Inventory
|
|
-
|
0.1
|
-
|
Trade and other
receivables
|
|
15.9
|
13.0
|
15.3
|
Deferred consideration
|
19
|
0.3
|
-
|
-
|
Cash and cash equivalents
|
|
13.0
|
22.1
|
10.7
|
|
|
29.2
|
35.2
|
26.0
|
Assets classified as held for sale
|
21
|
-
|
-
|
1.0
|
Total assets
|
|
59.8
|
55.5
|
57.4
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
(21.9)
|
(18.8)
|
(19.9)
|
Borrowings
|
|
-
|
(1.0)
|
-
|
Lease liabilities
|
14
|
(0.3)
|
(0.6)
|
(0.8)
|
Provisions
|
15
|
(0.7)
|
(0.5)
|
(0.9)
|
|
|
(22.9)
|
(20.9)
|
(21.6)
|
Non-current liabilities
|
|
|
|
|
Lease liabilities
|
14
|
(0.5)
|
(0.2)
|
(0.2)
|
Provisions
|
15
|
-
|
(0.4)
|
-
|
|
|
(0.5)
|
(0.6)
|
(0.2)
|
Liabilities classified as held for sale
|
20
|
-
|
-
|
(0.1)
|
Total liabilities
|
|
(23.4)
|
(21.5)
|
(21.9)
|
|
|
|
|
|
Net
assets
|
|
36.4
|
34.0
|
35.5
|
|
|
|
|
|
Equity
|
|
|
|
|
Share capital
|
17
|
0.3
|
0.3
|
0.3
|
Share premium
|
17
|
27.4
|
27.4
|
27.4
|
Retained earnings and other
reserves
|
17
|
8.7
|
6.3
|
7.8
|
Total equity
|
|
36.4
|
34.0
|
35.5
|
Condensed consolidated statement of changes in
equity
for the 26 weeks ended 29 June 2024
(26 weeks ended 1 July 2023 and the 52 weeks ended 30 December
2023)
|
|
Share
capital
|
Share
premium
|
Retained earnings and Other
reserves
|
Total
equity
|
|
|
£m
|
£m
|
£m
|
£m
|
Equity as at 30 December 2023 (audited)
|
|
0.3
|
27.4
|
7.8
|
35.5
|
Profit for the period
|
|
-
|
-
|
2.2
|
2.2
|
Total comprehensive profit for the period
|
|
-
|
-
|
2.2
|
2.2
|
Long-term incentive share based
payments charge
|
|
-
|
-
|
0.2
|
0.2
|
Dividend payable to shareholders on
10 July 2024~
|
|
-
|
-
|
(1.5)
|
(1.5)
|
Equity as at 29 June 2024 (unaudited)
|
|
0.3
|
27.4
|
8.7
|
36.4
|
|
|
|
|
|
|
Equity as at 31 December 2022 (audited)
|
|
0.3
|
24.6
|
9.1
|
34.0
|
Profit for the period
|
|
-
|
-
|
1.3
|
1.3
|
Total comprehensive profit for the period
|
|
-
|
-
|
1.3
|
1.3
|
Issue of new ordinary
shares
|
|
-
|
2.8
|
(2.8)
|
-
|
Long-term incentive share based
payments charge
|
|
-
|
-
|
0.1
|
0.1
|
Dividend payable to shareholders on 5
July 2023
|
|
-
|
-
|
(1.4)
|
(1.4)
|
Equity as at 1 July 2023 (unaudited)
|
|
0.3
|
27.4
|
6.3
|
34.0
|
|
|
|
|
|
|
Equity as at 01 January 2023 (audited)
|
|
0.3
|
24.6
|
9.1
|
34.0
|
Profit for the period
|
|
-
|
-
|
2.7
|
2.7
|
Total comprehensive profit for the period
|
|
-
|
-
|
2.7
|
2.7
|
Issue of new ordinary
shares
|
|
-
|
2.8
|
(2.8)
|
-
|
Long-term incentive share based
payments charge
|
|
-
|
-
|
0.2
|
0.2
|
Dividend payable to shareholders on 5
July 2023
|
|
-
|
-
|
(1.4)
|
(1.4)
|
Equity as at 30 December 2023 (audited)
|
|
0.3
|
27.4
|
7.8
|
35.5
|
~ The Dividend payable to
shareholders was approved at the 30 May 2024 AGM, in relation to
the FY23 financial performance, and paid to shareholders on 10 July
2024. The Company had sufficient distributable reserves at the
Interim to support the dividend payment.
Condensed consolidated cash flow statement
for the 26 weeks ended 29 June 2024
(26 weeks ended 1 July 2023 and the 52 weeks ended 30 December
2023)
|
|
26 weeks ended
29 Jun 24
|
26 weeks
ended
1 Jul 23
|
52 weeks
ended
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(adjusted)
|
|
Notes
|
£m
|
£m
|
£m
|
Cash flow from operating
activities
|
16
|
4.9
|
0.3
|
4.2
|
Net operating cash flows from
discontinued activities
|
|
-
|
-
|
0.2
|
Net
cash inflow from operating activities
|
|
4.9
|
0.3
|
4.4
|
|
|
|
|
|
Investing activities
|
|
|
|
|
Deferred consideration
|
|
-
|
(2.5)
|
-
|
Cash acquired in
subsidiaries
|
|
-
|
-
|
1.4
|
Acquisition of
subsidiaries
|
|
-
|
(1.4)
|
(16.5)
|
Acquisition transaction
costs
|
|
(0.2)
|
-
|
(0.4)
|
Incomplete acquisition
|
|
(0.8)
|
-
|
(0.5)
|
Interest earned
|
8
|
0.1
|
0.4
|
0.7
|
Intangible assets purchases and
acquisition
|
11
|
(1.2)
|
(1.0)
|
(1.7)
|
Tangible assets purchases and
acquisition
|
12
|
(0.1)
|
(0.3)
|
(0.4)
|
Net investing cashflows from
discontinued activities
|
|
-
|
|
0.1
|
Net
cash outflow from investing activities
|
|
(2.2)
|
(4.8)
|
(17.3)
|
|
|
|
|
|
Financing activities
|
|
|
|
|
Interest paid
|
7
|
-
|
(0.1)
|
(0.1)
|
Dividends paid
|
|
-
|
-
|
(1.4)
|
Debt repayment
|
|
-
|
-
|
(1.0)
|
Capital repayments of lease
payments
|
14
|
(0.4)
|
(0.3)
|
(0.8)
|
Interest element of lease rental
payments
|
7
|
-
|
-
|
(0.1)
|
Net
cash generated from financing activities
|
|
(0.4)
|
(0.4)
|
(3.4)
|
|
|
|
|
|
Net (decrease)/increase in cash and
cash equivalents
|
|
2.3
|
(4.9)
|
(16.6)
|
Net (decrease)/increase in cash and
cash equivalents from discontinued ops
|
|
-
|
-
|
0.3
|
Total net (decrease)/increase in cash
and cash equivalents
|
|
2.3
|
(4.9)
|
(16.3)
|
Cash and cash equivalents at the
beginning of the period
|
|
10.7
|
27.0
|
27.0
|
Cash
and cash equivalents at the end of the period
|
|
13.0
|
22.1
|
10.7
|
|
|
|
|
|
Cash and cash equivalents -
continuing operations
|
12.7
|
22.1
|
10.4
|
Cash and cash equivalents -
discontinued operations
|
0.3
|
-
|
0.3
|
Cash
and cash equivalents at the end of the period
|
|
13.0
|
22.1
|
10.7
|
Notes to the consolidated financial
statements
1.
General information
National World plc (the "Company"
or "National World") is a public company listed on the London Stock
Exchange in England and Wales. The Company is domiciled in England
and its registered office is Suite E3, Joseph's Well, Hanover Walk,
Leeds, LS3 1AB, United Kingdom.
The principal activities of the
Group are to provide news and information services in the United
Kingdom through a portfolio of multimedia publications and
websites.
The condensed consolidated Interim
Financial Statements of the Company and its subsidiaries for the
26-week period ended 29 June 2024 comprise the Company and its
subsidiaries (together referred to as the 'Group').
These Interim Financial Statements
do not comprise statutory accounts within the meaning of Section
434 of the Companies Act 2006. Statutory accounts for the 52 weeks
ended 30 December 2023 were approved by the Board of Directors on
21 March 2024 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not
contain an emphasis of matter paragraph and did not contain any
statement under Section 498 of the Companies Act 2006.
The auditors, Crowe U.K. LLP, have
carried out a review of the Interim Financial Statements and their
report is set out at the end of this document.
The financial information for the
52 weeks ended 30 December 2023 is extracted from National World
plc's financial statements for that year, with the exception of a
restatement of results to show the Press Computer Systems Limited
business as a discontinued operations due to its disposal on 31
March 2024 (refer Note 19). These Interim Financial Statements have
been prepared in accordance with the Disclosure and Transparency
Rules of the Financial Conduct Authority and with International
Accounting Standard 34, as adopted by the United
Kingdom.
The half-yearly financial report was
approved by the Directors on 1 August 2024. This announcement
is available at the Company's registered office at Suite E3,
Joseph's Well, Hanover Walk, Leeds, LS3 1AB, United Kingdom and on
the Company's website at www.nationalworldplc.com.
2.
Basis of preparation
These Interim Financial Statements
have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Conduct Authority and with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the United Kingdom. The consolidated
Interim Financial Statements were authorised for issue by the Board
of Directors on 1 August 2024.
These Interim Financial Statements
are presented in British pounds, which is the functional currency
of all entities in the Group. All financial information has been
rounded to the nearest hundred thousand except when otherwise
indicated.
These Interim Financial Statements
have been prepared under the historical cost basis.
Going concern
These consolidated financial
statements have been prepared on a going concern basis as set out
in the Financial Review in this half-yearly financial
report.
Changes in accounting policies and
disclosures
The standards that became
applicable in the period did not materially impact the Group's
accounting policies and did not require retrospective
adjustments.
3.
Material accounting policies
The accounting policies adopted are
consistent with those of National World plc for the previous year.
National World plc's annual report is available at
corporate.nationalworld.com.
Taxes on income in the interim
periods are accrued using tax rates that would be applicable to
expected total annual profit or loss.
New and revised IFRS Standards in issue but not yet
effective
There are no standards that are
issued but not yet effective that would be expected to have a
material impact on the Group.
Basis of consolidation
The Group Interim Financial
Statements consolidate the Interim Financial Statements of National
World plc and all its subsidiary undertakings owned during the 26
week period ended 29 June 2024.
Subsidiaries are included in the
Group's Interim Financial Statements using the acquisition method
of accounting. The results of subsidiaries acquired or disposed of
during the period are consolidated from the effective date of
acquisition or up to the effective date of disposal, as
appropriate. Purchase consideration is allocated to the assets and
liabilities on the basis of their fair value at the date of
acquisition. All intra-group transactions, balances, income and
expenses are eliminated on consolidation.
Where necessary, adjustments are
made to the Interim Financial Statements of subsidiaries to bring
the accounting policies used into line with those used by the
Group.
Alternative performance measures
The Company presents the results on
a statutory and adjusted basis. The Company believes that the
adjusted basis will provide investors with useful supplemental
information about the financial performance of the Group, enable
comparison of financial results between periods where certain items
may vary independent of business performance, and allow for greater
transparency with respect to key performance indicators used by
management in operating the Group and making decisions. Although
management believes the adjusted basis is important in evaluating
the Group, they are not intended to be considered in isolation or
as a substitute for, or as superior to, financial information on a
statutory basis. The alternative performance measures are not
recognised measures under IFRS and do not have standardised
meanings prescribed by IFRS and may be different to those used by
other companies, limiting the usefulness for comparison purposes.
Note 21 sets out the reconciliation between the statutory and
adjusted results.
Adjusting items
Adjusting items relate to costs or
incomes that derive from events or transactions that fall within
the normal activities of the Group, but are excluded from the
Group's adjusted profit measures, individually or, if of a similar
type in aggregate, due to their size and/or nature in order to
better reflect management's view of the performance of the Group.
The adjusted profit measures are not recognised profit measures
under IFRS and may not be directly comparable with adjusted profit
measures used by other companies. Details of adjusting items are
set out in Note 21.
Discontinued operations
On 31 March 2024 the Group
announced and completed the disposal of the Press Computer Systems
business, intangible and tangible assets to Naviga 1 UK Limited. In
accordance with IFRS5 "Non-current assets held for sale and
discontinued operations" the net results for the year are presented
within discontinued operations in the income statement.
4.
Critical accounting judgements and key sources of estimation
uncertainty
Critical judgements in applying the Group's accounting
policies
The preparation of financial
statements requires management to exercise judgement in applying
the Group's accounting policies. It also requires the use of
certain critical accounting estimates and assumptions that affect
the reported amounts of assets, liabilities, income and expenses.
Actual amounts may differ from these estimates. The Directors have
identified the following critical accounting judgements or
estimates relating to the financial information of the
Group.
Key sources of estimation uncertainty
Critical judgements in applying the Group's accounting
policies
Useful life assumption in
respect of intangible assets
There is judgment required
regarding the useful lives assigned to acquired publishing titles,
brands, customer relationships and other intangible assets.
The Directors have considered the titles acquired in the period to
have useful lives of five years and these intangibles will be
amortised over these periods on a straight-line
basis.
Valuation judgements
Acquisitions
On 31 May 2024 the Group acquired
Athletics Weekly business and assets, which do not meet the
criteria of business combinations. The acquired asset has
been disclosed as an intangible asset - publishing titles in the
period.
5.
Revenue
The analysis of the Group's
contracted revenue for the period from continuing operations is as
follows:
|
|
26 weeks ended
29 Jun 24
|
26 weeks ended
1 Jul 23
|
52 weeks ended
30 Dec 23
|
|
|
(unaudited)
|
restated1
|
restated2
|
|
|
£m
|
£m
|
£m
|
Continuing revenue
|
|
|
|
|
Print revenue
|
|
35.4
|
30.4
|
63.6
|
Digital revenue
|
|
10.0
|
8.9
|
18.4
|
Other
|
|
3.4
|
2.3
|
6.0
|
Total revenue
|
|
48.8
|
41.6
|
88.0
|
126 weeks ended 1 Jul 23 revenues have been reclassified as
presented and described below.
252 weeks ended 30 Dec 23 audited revenues has been restated to
reclassify £0.4 million of PCS Other Revenue as discontinued
operations, Note 19.
Revenues for the 26 weeks ended 1
Jul 23 have been reclassified, as shown in the table below, to
include £1.3 million of Events revenue within the Other revenue
category, which was previously reported within Print Publishing
revenue. This reporting change aligns to the strategic focus on
Events following the acquisition of Insider Media Limited and its
subsidiary Newsco Insider Limited.
Other revenue for 2023 of £6.0
million includes £4.0 million of Events revenue, and has been
restated to exclude £0.4 million of PCS revenue2.
The analysis of the Group's
contracted revenue from reported to reclassified Revenues for the
26 weeks ended 1 Jul 23 is presented in the table below:
|
26 weeks ended
29 Jun 24
|
26 weeks ended
1 Jul 23
|
26 weeks ended
1 Jul 23 Events
revenue
|
26 weeks ended
1 Jul 23
Previously
reported
|
|
(unaudited)
£m
|
£m
|
£m
|
£m
|
Print publishing
|
35.4
|
30.4
|
1.3
|
31.7
|
Digital publishing
|
10.0
|
8.9
|
-
|
8.9
|
Other
|
3.4
|
2.3
|
(1.3)
|
1.0
|
Total revenue
|
48.8
|
41.6
|
-
|
41.6
|
6.
Non-recurring items
Profit for the period is after the
following items that are unusual because of their nature, size or
incidence:
|
|
26 weeks ended
29 June 24
|
26 weeks ended
1 Jul 23
|
52 weeks ended
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
|
£m
|
£m
|
£m
|
Non-recurring items - Continuing operations
|
|
|
|
|
Investment impairment
|
a
|
1.1
|
-
|
-
|
Restructuring
|
b
|
0.6
|
1.0
|
3.6
|
Transaction costs
|
c
|
-
|
0.2
|
1.6
|
ROUA impairment
|
d
|
-
|
-
|
0.1
|
Property rationalisation
|
d
|
-
|
-
|
0.1
|
Total non-recurring items - continuing
operations
|
1.7
|
1.2
|
5.4
|
|
|
|
|
|
Non-recurring items - Discontinued
operations
|
|
|
|
Gain on sale - PCS
|
e
|
(1.0)
|
-
|
-
|
Total non-recurring items - Continuing and discontinued
operations
|
|
0.7
|
1.2
|
5.4
|
a) Investment impairment
The impairment relates to the
investment value held in The News Movement being impaired in
full. The Directors have reviewed the carrying value of the
investment determined to write down the carrying value, based on
the challenging trading performance reported in the
period.
b) Restructuring
costs
Restructuring costs of £0.6 million
have been expensed in the period and relate predominantly to
severance (H1 2023: £1.0 million, FY2023: £3.6 million).
c) Transaction costs
In 2023:
· £0.4
million was incurred in relation to completed acquisitions,
including the successful acquisition of Insider Media Limited and
its subsidiary Newsco Insider Limited, and MNA and PCS acquisitions
(H1 2023: £0.1 million, H2 2023: £0.3 million).
· £1.2
million of professional fees were incurred in relation to
incomplete acquisitions (H1 2023: £0.1 million, H2 2023: £1.1
million).
d) Property rationalisation/ROUA
impairment
The prior year charge relates to
the exit of a number of leased offices resulting in a £0.1 million
impairment of ROU assets and £0.1 million onerous property
provision.
e) Gain on sale - PCS
On 31 March 2024 the Group disposed
of Press Computer Systems Limited which it had acquired 6 months
earlier as part of the Midland News Association acquisition.
The Group will receive £3.5 million consideration for the disposal,
to Naviga, in the form of service credits which the Group will
utilise against technology services over the 5 year software
agreement that it has signed with Naviga.
In the period, the Group has
recorded a £1.0 million net gain on sale (Note 19) comprising £3.5
million deferred consideration fair valued to £2.2 million offset
by £0.2 million of professional fees and £1.0 million write-down of
PCS assets disposed.
7.
Finance costs
|
26 weeks ended 29 Jun
24
|
26 weeks
ended
1 Jul
23
|
52 weeks ended
30 Dec 23
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
£m
|
£m
|
£m
|
Interest on interest only unsecured
loan notes
|
-
|
0.1
|
0.1
|
Interest on lease
liabilities
|
-
|
-
|
0.1
|
Total finance costs
|
-
|
0.1
|
0.2
|
The unsecured loan notes were repaid
on 30 December 2023. Prior period interest was being accrued
at 15% on £1.0 million of interest only unsecured loan
notes.
8.
Interest Income
|
26 weeks ended 29 Jun
24
|
26 weeks
ended
1 Jul
23
|
52 weeks ended
30 Dec 23
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
£'m
|
£m
|
£m
|
Interest Income
|
0.1
|
0.4
|
0.7
|
Total Interest Income
|
0.1
|
0.4
|
0.7
|
9.
Tax
Income tax (charge) is recognised
based on management's estimate of the weighted average effective
annual income tax rate expected for the full financial year. The
estimated average tax rate used for 2024 is 25%.
|
|
26 weeks ended
29 Jun 24
|
26 weeks ended
1 Jul 23
|
52 weeks ended
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
|
£m
|
£m
|
£m
|
Profit before tax - continuing
operations
|
|
2.3
|
1.7
|
3.1
|
Profit before tax - discontinued
operations
|
|
1.1
|
-
|
-
|
|
|
3.4
|
1.7
|
3.1
|
Tax at the UK corporation tax rate of
25% (2023: 23.5%)
|
|
(0.6)
|
(0.4)
|
(0.7)
|
Effects of:
|
|
|
|
|
Expenses not allowable
|
|
(0.3)
|
-
|
(0.1)
|
Group relief/utilisation of
losses
|
|
(0.4)
|
-
|
-
|
Deferred tax asset recognised for tax
losses
|
|
-
|
-
|
0.5
|
Effect of increase in deferred tax
rate to 25%
|
|
-
|
-
|
(0.1)
|
Prior year adjustments
|
|
-
|
-
|
0.1
|
Other timing differences
|
|
-
|
-
|
(0.1)
|
Total tax (charge) for the period - continuing
operations
|
(1.3)
|
(0.4)
|
(0.4)
|
Effective tax rate for continuing operations
|
|
56%
|
26%
|
11%
|
Total tax credit for the period - discontinuing
operations
|
0.1
|
-
|
-
|
Effective tax rate for discontinued
operations
|
|
(10%)
|
-
|
-
|
For Continuing Operations, the
difference to the standard rate of tax of 25% is due to disallowed
expenses including The News Movement investment impairment of £1.1
million and group relieving brought forward losses to offset gains
in Discontinued operations.
For Discontinued Operations, the
difference to the standard rate of tax of 25% is due to benefit of
group relief, disallowed expenses including disposal costs of £0.2
million and the write-down of intangible and tangible assets of
£1.0 million for which the allowable deduction has already been
taken in prior periods by the former owner of the
assets.
At the period-end the Group has
total tax losses carried forward of £13.4 million recognised as a
deferred tax asset (30 December 2023: £17.9 million, 1 July 2023:
£17.8 million), calculated using a corporate tax rate of 25%. The
Group expects the losses will be utilised over the next three
years. Tax losses of £2.2 million were unrecognised at the
prior half-year and have subsequently been recognised.
The deferred tax balance has
decreased by £0.8 million to £1.7 million at the period end,
reflecting utilisation of tax losses against profits arising in the
period including the gain on disposal of PCS which is taxable on
completion.
10.
Earnings per share
Basic earnings per share is
calculated by dividing profit for the period attributable to equity
holders of the parent by the weighted average number of ordinary
shares during the period and diluted earnings per share is
calculated by adjusting the weighted average number of ordinary
shares in issue on the assumption of conversion of all potentially
dilutive ordinary shares.
|
|
26 weeks ended
29 Jun 24
|
26 weeks ended
1 Jul 23
|
52 weeks ended
30 Dec 23
|
|
|
(unaudited)1
|
(unaudited)1
|
(adjusted)1
|
|
|
m
|
m
|
m
|
Weighted average number of ordinary
shares for basic earnings per share
|
|
268
|
262
|
265
|
Effect of dilutive ordinary shares in
respect of unexercised under the Value Creation Plan
|
|
4
|
4
|
4
|
Weighted average number of ordinary shares for diluted
earnings per share
|
|
272
|
266
|
269
|
112.7 million new ordinary shares were issued on 3 May 2023 to
satisfy the value creation plan award, of which 4.3 million share
options remain unexercised at the period end (Note 18).
|
|
26 weeks ended
29 Jun 24
|
26 weeks ended
1 Jul 23
|
52 weeks
ended
30 Dec 23
|
|
|
pence
|
pence
|
pence
|
Statutory earnings per share:
|
|
|
|
|
Continuing
operations
Basic
|
|
0.4
|
0.5
|
1.0
|
Diluted
|
|
0.4
|
0.5
|
1.0
|
|
|
|
|
|
Discontinued
operations
|
|
|
|
|
Basic
|
|
0.4
|
-
|
(-)
|
Diluted
|
|
0.4
|
-
|
(-)
|
|
|
|
|
|
Continuing and discontinued
operations
|
|
|
|
|
Basic
|
|
0.8
|
0.5
|
1.0
|
Diluted
|
|
0.8
|
0.5
|
1.0
|
|
|
|
|
|
Adjusted earnings per share from:
|
|
|
|
|
Continuing
operations
Basic
|
|
1.4
|
0.9
|
2.8
|
Diluted
|
|
1.3
|
0.9
|
2.8
|
|
|
|
|
|
Discontinued
operations
|
|
|
|
|
Basic
|
|
(-)
|
-
|
(-)
|
Diluted
|
|
(-)
|
-
|
(-)
|
|
|
|
|
|
Continuing and discontinued
operations
|
|
|
|
|
Basic
|
|
1.4
|
0.9
|
2.8
|
Diluted
|
|
1.3
|
0.9
|
2.8
|
11.
Intangible assets
|
|
Publishing titles -
Regional
|
Digital intangible
assets
|
Brand
|
Customer
relationships
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
Opening balance (audited)
|
|
7.6
|
1.7
|
1.4
|
0.9
|
11.6
|
Additions
|
|
-
|
1.0
|
-
|
-
|
1.0
|
Acquisitions - asset
purchase
|
|
0.2
|
-
|
-
|
-
|
0.2
|
Amortisation charge for the
period
|
|
(0.4)
|
(0.3)
|
(0.1)
|
(0.1)
|
(0.9)
|
Carrying value at 29 June
2024
|
|
7.4
|
2.4
|
1.3
|
0.8
|
11.9
|
The opening balance includes
JPIMedia Group intangible assets, consisting of regional publishing
titles and digital intangible assets acquired in January 2021 for
£5.3 million, Scoopdragon and Newschain assets of £0.3 million,
Rotherham Advertiser £0.4 million, Insider Media brand and customer
relationship assets of £2.5 million and Midland News Association
titles and digital brand assets totalling £3.2 million, software
and digital development assets of £1.4 million net of accumulated
amortisation of £1.5 million.
Acquisitions in the period relate to
the asset purchase of Athletics Weekly on 31 May 2024.
Intangible assets are amortised over
their useful economic life and the carrying value of the titles is
reviewed when there are indicators that an impairment has
occurred.
12.
Tangible assets
|
|
|
|
Tangible
assets
|
|
|
|
|
£m
|
Cost
|
|
|
|
|
At 30 December 2023
(audited)
|
|
|
|
2.2
|
Additions
|
|
|
|
0.2
|
Disposals
|
|
|
|
(0.1)
|
At 29 June 2024
|
|
|
|
2.3
|
Accumulated depreciation
|
|
|
|
|
At 30 December 2023
(audited)
|
|
|
|
(1.1)
|
Charge for the period
|
|
|
|
(0.3)
|
Disposals
|
|
|
|
0.1
|
At 29 June 2024
|
|
|
|
(1.3)
|
Carrying amount
|
|
|
|
|
At 30 December 2023
(audited)
|
|
|
|
1.1
|
At 29 June 2024
|
|
|
|
1.0
|
The tangible assets are depreciated
over their useful lives. The additions in the period relate to IT
hardware required for Insider Media systems integration and IT
infrastructure required at two new leased offices in Manchester and
Wolverhampton.
13.
Investments
|
|
2024
|
2023
|
|
|
£m
|
£m
|
Opening balance
|
|
1.1
|
1.1
|
Impairment of investment
|
|
(1.1)
|
-
|
Carrying value at the end of the period
|
|
-
|
1.1
|
In the period, the Directors have
decided to impair the investment value held in TNM to £nil
value.
14.
Leases
The Group leases office buildings
and motor vehicles for use in its business operations. Leases of
offices generally have terms of between 2 and 10 years, with longer
period leases having a break clause after year 5. Motor vehicles
generally have a term of 4 years and are principally utilised by
the sales, editorial and IT departments. With the exception of
short term leases and leases of low value underlying assets, each
lease is reflected on the Statement of Financial Position as a
right of use asset and a corresponding lease liability. Rights of
use assets are depreciated over the term of associated
lease.
Right of use assets
|
|
Property
|
Motor
Vehicles
|
Total
|
|
|
£m
|
£m
|
£m
|
Carrying amount at 30 December 2023
(audited)
|
0.2
|
0.6
|
0.8
|
Additions
|
|
0.3
|
-
|
0.3
|
Disposals
|
|
-
|
(0.1)
|
(0.1)
|
Depreciation charge for the
period
|
|
(0.1)
|
(0.1)
|
(0.2)
|
Carrying amount at 29 June 2024
(unaudited)
|
0.4
|
0.4
|
0.8
|
Right of use liabilities
The carrying amounts of lease
liabilities and the movements during the period are set out
below:
|
|
Property
|
Motor
Vehicles
|
Total
|
|
|
£m
|
£m
|
£m
|
Carrying amount at 30 December 2023
(audited)
|
|
0.3
|
0.7
|
1.0
|
Additions
|
|
0.3
|
-
|
0.3
|
Disposals
|
|
-
|
(0.1)
|
(0.1)
|
Lease payments
|
|
(0.3)
|
(0.1)
|
(0.4)
|
Carrying amount at 29 June 2024 (unaudited)
|
|
0.3
|
0.5
|
0.8
|
The carrying amounts of lease
liabilities at the period end is set out below:
|
|
26 weeks ended
29 Jun 24
|
26 weeks ended
1 Jul 23
|
52 weeks ended
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
|
£m
|
£m
|
£m
|
Current liabilities
|
|
0.3
|
0.6
|
0.8
|
Non-current liabilities
|
|
0.5
|
0.2
|
0.2
|
Total
|
|
0.8
|
0.8
|
1.0
|
15.
Provisions
|
|
|
Property
rationalisation
|
Dilapidations
|
Total
|
|
|
£m
|
£m
|
£m
|
At
30 December 2023 (audited)
|
|
|
0.2
|
0.7
|
0.9
|
|
|
|
|
|
|
Utilised in the period
|
|
|
(0.1)
|
(0.1)
|
(0.2)
|
At
29 June 2024 (unaudited)
|
|
|
0.1
|
0.6
|
0.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Current provision
|
|
|
0.1
|
0.6
|
0.7
|
Non-current provision
|
|
|
-
|
-
|
-
|
Total provision at 29 July 2024
|
|
|
0.1
|
0.6
|
0.7
|
Property rationalisation
The property rationalisation
provision was first charged in 2021 when certain office locations
were vacated as the Group continued to adopt a flexible working
policy.
Leasehold property dilapidations provision
The provision for leasehold
dilapidations relates to the contractual obligations to reinstate
leasehold properties to their original state at the lease expiry
date. The Group has assessed the entire portfolio and made
provisions depending on the state of the property and the duration
of the lease and likely rectification requirements.
16.
Notes to the Cash Flow Statement
|
|
26 weeks ended
29 Jun 24
|
26 weeks
ended
1 Jul 23
|
52 weeks
ended
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
Notes
|
£m
|
£m
|
£m
|
Operating profit - continuing operations
|
2.2
|
1.4
|
2.6
|
Adjustments for
non-cash/non-operating items:
|
|
|
|
|
Amortisation of intangible
assets
|
11
|
0.9
|
0.4
|
1.0
|
ROUA and tangible assets depreciation
expense
|
12,14
|
0.5
|
0.3
|
0.8
|
Long term incentive plan
expense
|
18
|
0.2
|
0.1
|
0.2
|
Impairment of TNM
|
13
|
1.1
|
-
|
-
|
ROUA impairment
|
|
-
|
-
|
0.1
|
Operating cash flow before working
capital changes
|
|
4.9
|
2.2
|
4.7
|
Net (decrease)/increase in
provisions
|
15
|
(0.2)
|
(0.3)
|
(0.2)
|
|
|
4.7
|
1.9
|
4.5
|
Changes in working
capital:
|
|
|
|
|
(Increase)/decrease in
receivables
|
|
(0.6)
|
(1.1)
|
(0.7)
|
Increase/(decrease) in
payables
|
|
0.8
|
(0.5)
|
0.6
|
Cash
generated from operations
|
|
4.9
|
0.3
|
4.4
|
17.
Share capital and reserves
|
|
26 weeks
ended
29 Jun 24
|
26 weeks
ended
1 Jul 23
|
52 weeks ended
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
|
£m
|
£m
|
£m
|
Share capital
|
|
0.3
|
0.3
|
0.3
|
Share premium
|
|
27.4
|
27.4
|
27.4
|
Retained earnings and other
reserves
|
|
8.7
|
6.3
|
7.8
|
|
|
36.4
|
34.0
|
35.5
|
On 3 May 2023, a block listing for
12,663,363 new Ordinary Shares was completed to satisfy the
allotment of shares pursuant to the Company's 2019 Value Creation
Plan ("VCP"). The new Ordinary shares issued rank pari passu with
the Company's existing issued ordinary shares. In 2023 8,231,186 of
new Ordinary share options were exercised, and are included in the
share capital at the period end. The remaining 4,432,177 of the new
Ordinary share options have not been exercised however are entitled
to dividend equivalents payable in 2024, in accordance with the
rules of the VCP.
18.
Share Based Payments
Long
term incentive plan 2022
On 12 December 2022, the Company
granted 1,848,718 Long Term Incentive Shares ("LTIP 2022") option
awards to two Executive Directors. The awards vest after three
years if certain performance criteria are met during that period
and are subject to the continued employment of each participant.
Full details of the LTIP 2022 scheme can be found in the
Remuneration Report included within the 2022 Annual Report. The
Group recognised a charge of £44k in the period ended 29 June 2024
in relation to LTIP 2022 (FY2023: £90k).
Long
term incentive plan 2023
On 30 March 2023, the Company made
3,050,672 share option awards in the form of
nominal cost options under the Long Term Incentive Plan ("LTIP
2023") to the two founding Executive Directors and certain
senior managers. John Rowe has a separate long term conditional
bonus arrangement, payable in cash, that mirrors the LTIP 2023
scheme, for the equivalent of 389,527 share awards. The LTIP 2023 Performance Share options vest on 30 March 2026
and is conditional on meeting performance
conditions measured over a three-year period and is subject
to continued employment of each participant. Performance
conditions include compound annual growth in adjusted earnings per
share ("EPS"), and compound annual growth in total shareholder
return ("TSR") as approved by the Remuneration Committee. The
Group recognised a charge of £118k in the period ended 29 June 2024
(FY2023: £234k) in relation to LTIP 2023 (including the conditional
bonus arrangement).
Long
term incentive plan 2024
On 10 May 2024, the Company made
6,805,833 share option awards in the form of nominal cost options
under the Long Term Incentive Plan ("LTIP 2024") to three Executive
Directors and certain senior managers. John Rowe has a separate
long term conditional bonus arrangement, payable in cash, that
mirrors the LTIP 2024 scheme, for the equivalent of 616,518 share
awards. The LTIP 2024 Performance Share options vest on 10 May 2027
and is conditional on meeting performance conditions measured over
a three-year period and is subject to continued employment of each
participant. Performance conditions include compound annual growth
in adjusted earnings per share ("EPS"), and compound annual growth
in total shareholder return ("TSR") as approved by the Remuneration
Committee. The Group recognised a charge of £33k in the period
ended 29 June 2024 (FY2023: £nil) in relation to LTIP 2024
(including the conditional bonus arrangement).
19.
Press Computer Systems disposal
On 31 March 2024 the Group announced
and completed the disposal of the Press Computer Systems business,
intangible and tangible assets to Naviga 1 UK Limited, a
wholly-owned subsidiary of Naviga Inc.
The £3.5 million consideration for
the disposal, to Naviga, is received in the form of service credits
which the Group will utilise against the 5 year software agreement
that it has signed with Naviga. The £3.5 million deferred
consideration has been recognised at fair value and discounted to
£2.2 million (with £0.3 million recognised as current and £1.9
million non-current assets).
A net profit on disposal of £1.0
million is reported in the period, within discontinued operations,
comprising £2.2 million deferred
consideration, offset by £0.2 million of transaction costs and a
£1.0 million write-down of PCS assets disposed.
In accordance with IFRS5
'Non-Current Assets Held for Sale and Discontinued Operations', the
results and cash flows of this 'disposal group' are reported
separately from the performance of continuing operations at each
reporting date and comparatives have been restated.
The statutory profit after tax from
discontinued operations for the period ended 29 June 2024 was £1.2
million. The FY2023 comparatives have been adjusted to report
PCS results within discontinued operations, with the
reclassification including:
· £0.4
million Other Revenue,
· £0.4
million of Cost of Sales, and
· £0.1
million of Operating expenses before non-recurring
items.
There are no comparatives for H1
2023 as PCS was only acquired on 29 September 2023.
As part of the disposal, a
transitional services agreement (TSA) was agreed between the Group
and Naviga. The TSA includes services such as information
technology, finance and other overheads for varying periods of
time. Since the disposal, the Group has recognised net costs of
£0.2 million under the TSA.
Profit on disposal of operations
|
|
|
|
26 weeks to 29 June
2024
|
|
|
|
|
£m
|
Intangible assets
|
|
|
|
0.7
|
Tangible assets
|
|
|
|
0.3
|
Net
assets disposed
|
|
|
|
1.0
|
Add: Disposal costs
|
|
|
|
0.2
|
Carrying value of disposed operations
|
|
|
|
1.2
|
Consideration satisfied by
cash
|
|
|
|
-
|
Consideration satisfied by service
credits (discounted)
|
|
|
|
2.2
|
Profit on disposal of PCS
|
|
|
|
1.0
|
Disposal proceeds and investing activities of discontinued
operations
|
|
|
Note
|
26 weeks to 29 June
2024
|
|
|
|
|
£m
|
Cash consideration (above)
|
|
|
|
-
|
Disposal costs
|
|
|
6
|
(0.2)
|
Net
cash consideration
|
|
|
|
(0.2)
|
Consideration satisfied by service
credits (discounted)
|
|
|
6
|
2.2
|
Consideration satisfied by service
credits1
|
|
|
|
1.3
|
Net
consideration
|
|
|
|
3.3
|
1The
discount on the fair value of consideration will be unwound over
the term of the 5 year contract, and has not been recognised in the
Interim results 2024.
20.
Assets and liabilities classified as held for
sale
|
Note
|
26 weeks
ended
29 Jun 24
|
26 weeks
ended
1 Jul 23
|
52 weeks ended
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
Non-current assets classified as held
for sale
|
|
-
|
-
|
1.0
|
|
|
|
|
|
Liabilities classified as held for
sale
|
|
-
|
-
|
(0.1)
|
Total net assets classified as held for sale
|
|
-
|
-
|
0.9
|
The assets and liabilities of Press
Computer Systems Limited were classified as held for sale at the 52
weeks ended 30 December 2023. As disclosed in Note 19, the Group
sold the PCS business, intangible and tangible assets to
Naviga.
21.
Alternative performance measures
To provide clarity of the
underlying trading performance of the Group, the operating results
are presented on an adjusted basis. Adjusted results are before
non-recurring restructuring and organisational charges, IFRS16
adoption, transaction costs, amortisation of intangible assets and
impairment charges. The Directors believe that it is appropriate to
additionally present the alternative performance measures used by
management in running the business, and that it will present a more
meaningful and comparable financial result. The adjusted results
provide supplementary analysis of the 'underlying' trading of the
Group.
Operating profit as determined under
IFRS reconciles to adjusted operating profit:
|
|
26 weeks
ended
29 Jun 24
|
26 weeks ended
1 Jul 23
|
52 weeks
ended
30 Dec 23
|
|
|
(unaudited)
|
(unaudited)
|
(adjusted)
|
|
Notes
|
£m
|
£m
|
£m1
|
Operating profit as determined under IFRS
|
|
2.2
|
1.4
|
2.6
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Impairment of TNM
|
13
|
1.1
|
-
|
-
|
Lease costs
|
|
(0.3)
|
(0.2)
|
(0.3)
|
Depreciation on right of use
assets
|
14
|
0.2
|
0.1
|
0.4
|
Amortisation of intangible
assets
|
11
|
0.9
|
0.4
|
0.9
|
Restructuring costs
|
6
|
0.6
|
1.0
|
3.6
|
ROUA Impairment
|
6
|
-
|
-
|
0.1
|
Property rationalisation
|
6
|
-
|
-
|
0.1
|
Transaction costs
|
6
|
-
|
0.2
|
1.6
|
Adjusted operating profit from continuing
operations
|
|
4.7
|
2.9
|
9.0
|
Adjusted operating profit from discontinued
operations
|
|
0.1
|
-
|
0.1
|
Adjusted operating profit - continuing and discontinued
operations
|
|
4.8
|
2.9
|
9.1
|
Reconciliation of EBITDA to adjusted
EBITDA:
|
|
26 weeks ended
29 Jun 24
|
26 weeks ended
1 Jul 23
|
52 weeks
ended
30 Dec 23
|
|
Notes
|
(unaudited)
|
(unaudited)
|
(adjusted)1
|
|
|
£m
|
£m
|
£m
|
Continuing Operations
|
|
|
|
|
Operating profit as determined under IFRS
|
|
2.2
|
1.4
|
2.6
|
Depreciation and
amortisation
|
11,12,14
|
1.4
|
0.7
|
1.7
|
ROUA Impairment
|
|
-
|
-
|
0.1
|
EBITDA - continuing operations
|
|
3.6
|
2.1
|
4.4
|
EBITDA - discontinued operations
|
|
2.0
|
-
|
0.1
|
EBITDA - continuing and discontinued
operations
|
|
5.6
|
2.1
|
4.5
|
|
|
|
|
|
Continuing Operations
|
|
|
|
|
Adjusted operating profit
|
|
4.7
|
2.9
|
9.0
|
Depreciation on tangible
assets
|
12
|
0.3
|
0.2
|
0.4
|
Adjusted EBITDA - continuing operations
|
|
5.0
|
3.1
|
9.4
|
Adjusted EBITDA - discontinued operations
|
|
0.1
|
-
|
0.1
|
Adjusted EBITDA - continuing and discontinued
operations
|
|
5.1
|
3.1
|
9.5
|
152 weeks ended 30 Dec 23 audited consolidated income statement
has been restated above due to classification of PCS as
discontinued operations, see Note 19.
Gain on sale of PCS
The £3.5 million consideration for
the disposal, to Naviga, is in the form of service credits and has
been recognised in H1 2024 at fair value on completion when the
business was sold and discounted to £2.2 million. For
adjusted reporting measures, the Group will recognise the £3.5
million service credit evenly across the 5 year contractual period,
commencing 1 July 2024, to better match the services received to
which it be utilised against.
22.
Post balance sheet events
On 1 July 2024, the Group announced a
partnership with Reach and Axiom Media Alliance ("AMA"), forming
two new strategic partnerships for its digital and print
advertising sales. The Group expects to sign the contracts in
August. From 1 October 2024, Reach Solutions will represent
the Group's print brands for display and public notice advertising
"to all leading regional and London-based
agencies".
On 8 July 2024, the Group acquired
Serious About Rugby League, as part of its continued strategy to
focus on higher-value, specialist content.
On 10 July 2024, the
0.55 pence per share
dividend, in relation to FY23 performance, was paid to shareholders
at a total cost of £1.5 million.
A maiden interim dividend of 0.2
pence per share has been approved and declared by the Board and
will be paid on 20 September 2024 to shareholders on the register
at 9 August 2024. The dividend reflects the Board's confidence in the ongoing
strong cash generation of the business, the future prospects of the
Group and its strong balance sheet. The Board continues to adopt a
progressive dividend policy. The Company has sufficient
distributable reserves at the Interim to support the dividend
declaration.
INDEPENDENT AUDITOR'S REVIEW REPORT TO NATIONAL WORLD
PLC
On
the interim financial information for the six months ended 29 June
2024
Conclusion
We have been engaged by National
World plc (the "Group"), to review the condensed set of financial
statements in the half-yearly financial report for the 26 week
period ended 29 June 2024 which comprise the condensed consolidated
income statement, condensed consolidated statement of comprehensive
income, condensed consolidated statement of financial position,
condensed consolidated statement of changes in equity, condensed
consolidated cash flow statement and the related notes 1 to
22.
Based on our review, nothing has
come to our attention that causes us to believe that the condensed
set of financial statements in the half-yearly financial report for
the 26 week period ended 29 June 2024 is not prepared in all
material aspects, in accordance with UK-adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct
Authority.
Basis for Conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410 - "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued for use in the United
Kingdom. A review of interim financial information consists of
making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an
audit opinion.
As disclosed in note 1, the annual
financial statements of the Group are prepared in accordance with
UK-adopted international accounting standards. The condensed set of
financial statements included in this half-yearly report has been
prepared in accordance with UK-adopted International Accounting
Standard 34 "Interim Financial Reporting".
Conclusions relating to going concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or
that management have identified material uncertainties relating to
going concern that are not appropriately disclosed.
This conclusion is based on the
review procedures performed in accordance with ISRE(UK) 2410,
however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of Directors
The Directors are responsible for
preparing the half-yearly financial report in accordance with
UK-adopted International Accounting Standard 34 and the Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
In preparing the half-yearly
financial report, the Directors are responsible for assessing the
Group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to
liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly report,
we are responsible for expressing to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report. Our conclusion, including our Conclusion
Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for
Conclusion paragraph of this report.
Use
of our report
This report is made solely to the
Company in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Financial Reporting Council. Our work has been undertaken so that
we might state to the Company those matters we are required to
state to it in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company, for our
review work, for this report, or for the conclusions we have
formed.
John Glasby
Statutory Auditor
Crowe U.K. LLP
London
EC4M 7JW
1 August 2024