Trading update for the 21 weeks to 27 May 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "EUWA")) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

National World plc

("National World," "the Company" or "the Group")

Trading update for the 21 weeks to 27 May 2023

National World plc issues the following trading update for the 21 weeks to 27 May 2023, ("the period") ahead of its Annual General meeting on 24 May 2023.

Highlights

·      7% digital growth in challenging economic conditions

·      Overall revenue decline mitigated by digital growth and acquisitions

·      Continued pivoting towards more diverse and sustainable revenue streams

·      Maintaining profit expectations for the full year 

·      Maiden dividend proposed, payable 5 July to shareholders on the register on 2 June

National World's Chairman, David Montgomery, said:

"We have continued to reposition the business towards our new, digital-only operating model - meaning full automation of all content resourcing and production processes across all platforms, including print. We already lead the local publishing sector in video exploitation and are in the process of relaunching the majority of our brands deploying the new model.

"Our five recent acquisitions focus on original content serving key communities, by sector and locality, and expected to add further acquisitions in the coming months.

"These acquisitions, combined with the accelerated implementation of the new operating model, we expect to compensate for the recent downturn in advertising sales impacting the sector."

Trading

Against a difficult background for advertising, total Revenue for the period has declined by just 5% year-on-year, benefiting from both continuing growth in digital and recent acquisitions. In April and May revenue is down 1% year-on-year following an 8% decline in the first quarter.

Digital revenue is expected to grow by 7% year-on-year for the period. Video revenues have more than doubled compared to the same period last year, driven by a 15% increase in video views. 

Overall audience for the period increased by 20% year-on-year with page views reaching a peak of 167 million in the January football transfer month. Audience increased by 9% year-on-year, excluding the benefit of the Scoopdragon and Newschain acquisitions. Although continuing to grow, digital revenue momentum has been impacted by lower yields reflecting the sector-wide cooling of advertising demand.

Print revenue decline of 13% in the first quarter has been reduced to a 3% decline in April and May, again helped by acquisitions, including the addition of the Rotherham Advertiser, which is now the Group's highest circulation weekly newspaper.

Acquisitions

For the five acquisitions completed in the period, the Group paid a total consideration of £3.0 million, (£1.9 million consideration net of cash acquired) funded from its existing cash resources. Revenue of £2.0 million and EBITDA contribution of £0.4 million are expected in the first half, with the bulk of this flowing from 1 May. For the full year, revenues of approximately £7.0 million are expected with an EBITDA contribution of more than £1.0 million.

Management is continuing to look at further potential value-creating acquisitions that align with the Group's strategy as it repositions the business towards the new operating model, underpinned by greater productivity in specialist and original content. 

The acquisition of Insider Media, with its regional B2B audience, indicates the route to sustainable revenues and growth as this business focuses on expert coverage of its sectors through daily online reporting, digital newsletters, events and, soon, exclusive video content.

Management has accelerated plans to integrate the recent acquisitions and to adopt the new operating model.  We are confident these actions will deliver the required operating cost savings from June onwards, rather than rely solely on the more optimistic forecasts of an advertising pick-up.

Financial position

The Group maintains a strong financial position with a cash balance of at least £21.0 million at the end of May, offset by £1.0 million of outstanding loan note debt.  Since the year-end, National World has made the final deferred instalment of £2.5 million in respect of the purchase of JPIMedia Group acquired in 2021.

The Board has recommended the payment of a maiden dividend on 5 July to shareholders on the register at 2 June in recognition of the Company's significant progress over the last two years, during which time it has generated Adjusted EBITDA of £19.8 million on the assets acquired at the start of 2021 for £10.2 million.

Outlook

The Company remains confident that investment and development of its digital business, together with the adoption of our new operating model and careful cost management, will continue to support profits and cash flow despite challenging economic conditions. Performance for the year is forecast to be in line with the Company's expectations.

- Ends -

For the purposes of UK MAR the person responsible for arranging for the release of this announcement on behalf of National World is David Montgomery, Executive Chairman.

Enquiries:

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.