TIDMNWOR
RNS Number : 6992H
National World PLC
31 July 2023
National World plc
("National World", the "Company" or the "Group")
Half-yearly Financial Report
Results for the 26 weeks ended 1 July 2023
-- Continued investment in acquisitions and launches signals return to revenue growth
-- 9% growth in digital revenues as business pivots to new operating model
-- 21% year-on-year increase in page views; 49% increase in video views
-- First Half 2023 Adjusted EBITDA of GBP3.1 million in line with expectations
-- Half year strong cash balance of GBP22.1 million
-- 0.5p per share maiden dividend paid on 5 July, commencing a progressive policy
-- Full year expectation unchanged with projected revenue increase on 2022
Adjusted results*^ Statutory results
H1 2023 H1 2022 H1 2023 H1 2022
GBPm GBPm GBPm GBPm
---------------------------- ---------- --------- --------- ---------
Revenue 41.6 43.5 41.6 43.5
EBITDA 3.1 5.9 2.1 4.9
Operating profit 2.9 5.7 1.4 4.1
Profit before tax 3.2 5.6 1.7 3.9
Earnings per share (pence) 0.9p 1.7p 0.5p 1.2p
---------------------------- ---------- --------- --------- ---------
* Adjusted results are before non-recurring items, amortisation
of intangible assets and impact of IFRS 16. Note 20 provides a
reconciliation between Statutory and Adjusted results.
^ Unaudited
Commenting on the results, Chairman, David Montgomery, said
" The company has successfully commenced the journey to revenue
growth in the first half. Measures to deliver a sustainable
multi-platform business continued apace despite the downturn in the
advertising market. Five acquisitions in the period and
improvements in newly launched online brands are replacing lost
revenue from heritage assets and we now expect overall revenues for
2023 to exceed last year. Strong growth, particularly in video
revenue, as well as the accelerated implementation of an innovative
operating model will contribute to the delivery of full year
profits in line with expectations ."
Total revenue down 4%, digital revenue up 9%, cash balance of
GBP22.1 million
-- Revenue improvement seen in the second quarter despite
challenging trading environment and against tough comparators .
Total Revenue was down 4% to GBP41.6 million, with a flat
year-on-year performance in quarter two, following an 8% decline in
quarter one.
-- Robust digital revenue growth , up 9% year-on-year to GBP8.9
million. The Group has delivered average monthly page views of 141
million in the first half, a 21% year-on-year improvement. Video
advertising continues to be an area of growth, with revenues up 67%
and total video views of 275 million in the first half, a 49%
year-on-year improvement.
-- Adjusted EBITDA of GBP3.1 million, down 47% and adjusted
operating profit is GBP2.9 million, c ontributing factors being the
downturn in advertising and investment in new brands. In the first
half, the Group accelerated plans to implement the new operating
model, which will deliver GBP1.1 million of savings in the second
half with c.GBP2.5 million of annualised cost savings and
restructuring costs of GBP0.9 million. However, the new model
primarily focuses on sustaining our news brands in local markets by
increasing reach and customer engagement. Investment in technology
and platforms is well advanced and the first relaunches of fully
automated and integrated print, online and video brands is expected
this quarter.
-- Acquisitions . For the five acquisitions completed in the
period, the Group paid a total consideration of GBP3.0 million,
(GBP1.9 million consideration net of cash acquired) funded from its
existing cash resources. Revenue of GBP2.0 million and EBITDA
contribution of GBP0.3 million are reported in the first half, with
the bulk of this flowing from 1 May. For the full year, revenues of
approximately GBP7.0 million are expected with an EBITDA
contribution of c.GBP1.0 million.
-- Investment . The Group has relaunched some of its key brands
in both print and digital products in the first half including The
Scotsman app relaunch and four of our daily print titles between
April and June. Two more relaunches have been delivered in July and
a final two will be complete in September. We continue to invest in
automation technology and video with 250 of our journalists
retrained in all aspects of TV journalism and operating new
equipment. Our first Freeview TV channel Shots! (Channel 276) was
launched on 19 July.
-- Strong balance sheet with significant financial flexibility ,
closing cash balance of GBP22.1 million at 1 July 2023, with
outstanding debt of GBP1.0 million. On 31 March 2023 , National
World made the final deferred instalment of GBP2.5 million in
respect of the purchase of JPIMedia Group acquired in 2021.
-- Dividend. On 24 May 2023, shareholders approved the payment
of a 0.5 pence per share maiden dividend payable on 5 July. The
dividend recognises the Company's significant progress over the
last two years, during which time it has generated Adjusted EBITDA
of GBP19.8 million on the assets acquired at the start of 2021 for
GBP10.2 million.
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. In July revenues have
increased by 2% year on year and the Company is poised to benefit
in the second half from at least three of its key elements - the
acquired businesses, new launches and relaunches of heritage brands
and video and TV expansion. Therefore the Board confirms its view
that the business will perform in line with 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 +44 (0)77 3970 1634
Olly Scott +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
The Group delivered a robust performance in line with
expectation for the period. The investment to support new launches
and organic development was maintained despite an advertising
downturn and a decline in revenue. The reliance on heritage print
assets has begun to reduce as the business pivots towards a more
diverse and dependable model through both acquisitions and
continued growth in specific digital activities. Currently trends
are more encouraging and the company is now well positioned to
benefit from its investment in developing areas like video,
subscriptions, apps and its new brands.
Overall revenue was GBP41.6 million, a decline of 4%. Following
an 8% decline in the first quarter against strong comparators,
revenue was flat in the second quarter and has begun the third
quarter a little ahead of last year.
The thrust of group strategy is to grow sustainable revenues
through a wider content and commercial agenda operating across all
platforms.
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.
Significant investment in sustaining newly launched online
brands and deploying staff resources to manage the implementation
of the new model contributed to the reduction in operating profit
in the period.
The Group delivered an adjusted EBITDA of GBP3.1 million and
adjusted operating profit of GBP2.9 million. Contributing factors
included the general advertising downturn, and the support for the
new brands that give National World a full UK footprint which are
expected to turn profitable in late 2024.
The Group delivered a statutory operating profit of GBP1.4
million. Statutory earnings per share were 0.5 pence per share
(2022: 1.2 pence per share) for the period. Adjusted earnings per
share for the period were 0.9 pence per share (2022: 1.7 pence per
share).
Since acquiring JPIMedia in January 2021, overall staff numbers
have come down from approximately 1,500 to 1,100 and productivity
has increased as this reduced number now service around twenty new
brands and five newly acquired businesses.
Both the investments in launches and acquisitions have had
limited effect on the group's cash which is GBP22.1 million at the
end of the period, which is after the GBP2.5 million final deferred
payment, made in March, for JPIMedia Group.
The five acquisitions bring in around GBP7 million of additional
revenue and are expected to contribute GBP1 million of EBITDA this
year.
The company has introduced multiple measures to create a
long-term sustainable business across all platforms to stem long
term revenue decline that has been previously addressed solely by
cost cutting.
The content agenda has been widened, something best demonstrated
by both the acquisition of Business Insider (Insider Media Limited)
and the specialist content focus of our premium heritage assets,
the Yorkshire Post, Scotsman and Belfast Newsletter.
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.
Three hundred, almost half our journalists, have been trained in
all aspects of video, including presenting and editing, and the
company has invested in equipping them with the latest kit.
This and other measures to accelerate the new operating model
have been the focus of management while also coping with
inflationary cost challenges and a depressed advertising market
impacting yields.
Key initiatives, both in acquisition and innovation, so far this
year include:
-- The rapid increase in video production, including training
and equipping 250 journalists, with a resultant 49% rise in video
views and 12% rise in engagement minutes. The year-on-year revenue
has doubled;
-- The launch of Freeview Channel 276, fully programmed and
automated with mainly original, home produced content;
-- The acquisition of four weekly newspapers, including the
Rotherham Advertiser, and Business Insider magazine, online and
events company with a combined total revenue of GBP7.0 million and
expected GBP1.0 million of EBITDA in 2023;
-- The development of Nationalworld.com, our national online
newspaper, and the wider City World portfolio in every major UK
city including London, that together should reach profitability in
the second half of 2024;
-- Overall increase in audience of 21% in the period and online revenue growth of 9%;
-- The 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 consolidation of a daily press unit to centrally relaunch
eight titles in a modern format;
-- The launch of The Scotsman subscriber app with an upgrade in
quality comparable to The Times and The Daily Telegraph. New apps
will be launched for the Yorkshire Post and the News Letter, also
for paying subscribers, and Nationalworld.com will offer a free app
as it develops its middle market wider audience; and
-- The resumption in growth of paid digital subscriptions on our
premium brands, with subscriber numbers up by 5% since December
2022 and the resumption of growth in registrations across our
network, up 2% year on year.
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.
Despite unfavourable economic conditions and an advertising
downturn, 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 improvement, gives
confidence that the company can meet its expectations for the full
year.
David Montgomery
Executive Chairman
31 July 2023
Financial review
Income statement
The statutory and adjusted results have been prepared for the 26
weeks ended 1 July 2023 (2023) and the comparative period is for
the 26 weeks ended 2 July 2022 (2022).
Note 20 sets out the reconciliation between the statutory and
adjusted results.
Adjusted results Statutory results
2023 2022 2023 2022
GBPm GBPm GBPm GBPm
-------------------------------------- --------- -------- --------- ---------
Revenue 41.6 43.5 41.6 43.5
-------------------------------------- --------- -------- --------- ---------
Operating Costs (38.5) (37.6) (38.3) (37.3)
Depreciation and Amortisation (0.2) (0.2) (0.7) (0.8)
Operating profit pre non-recurring
items 2.9 5.7 2.6 5.4
-------------------------------------- --------- -------- --------- ---------
Non-recurring items:
Restructuring costs - - (1.0) (1.3)
Transaction costs - - (0.2) -
Operating profit 2.9 5.7 1.4 4.1
Net finance income/(expense) 0.3 (0.1) 0.3 (0.2)
Profit before tax 3.2 5.6 1.7 3.9
-------------------------------------- --------- -------- --------- ---------
Tax (charge)/credit (0.8) (1.1) (0.4) (0.8)
Profit after tax 2.4 4.5 1.3 3.1
-------------------------------------- --------- -------- --------- ---------
Earnings per share - basic (pence) 0.9p 1.7p 0.5p 1.2p
Earnings per share - diluted (pence) 0.9p 1.6p 0.5p 1.1p
EBITDA 3.1 5.9 2.1 4.9
Operating profit margin % 7% 13% 3% 9%
EBITDA margin % 7% 14% 5% 11%
-------------------------------------- --------- -------- --------- ---------
The Group delivered a solid performance considering the
challenging market conditions in the period with revenue decreasing
4% to GBP41.6 million (2022: GBP43.5 million), and adjusted
operating profit decreasing to GBP2.9 million (2022: GBP5.7
million). Adjusted EBITDA in the period was GBP3.1 million (2022:
GBP5.9 million) with the EBITDA margin reducing by seven percentage
points to 7% (2022: 14%).
Adjusted finance income was GBP0.3 million (2022: GBP0.1 million
cost). Statutory financing income was GBP0.3 million (2022: GBP0.2
million cost) including IFRS16 lease finance costs.
Adjusted profit before tax decreased by GBP2.4 million to GBP3.2
million (2022: GBP5.6 million), while Statutory profit before tax
was GBP1.7 million, as a result of lower operating profit in the
period. Non-recurring costs decreased by GBP0.1 million to GBP1.2
million (2022: GBP1.3 million).
Statutory profit per share for the period was 0.5 pence per
share (2022: 1.2 pence per share). Adjusted earnings per share for
the period was 0.9 pence per share (2022: 1.7 pence per share).
Revenue
The table below provides a summary of revenue for the 26 weeks
ended 1 July 2023 with the comparative for the 26 weeks ended 2
July 2022.
2023 2022 Change Change
GBPm GBPm GBPm %
---------------------------- ----- ----- ------- -------
Print Publishing Revenue 31.7 34.6 (2.9) (8)%
---------------------------- ----- ----- ------- -------
Advertising 14.6 16.7 (2.1) (13)%
Circulation 14.9 16.5 (1.6) (10)%
Other 2.2 1.4 0.8 57%
Digital Publishing Revenue 8.9 8.2 0.7 9%
---------------------------- ----- ----- ------- -------
Advertising 5.6 5.0 0.6 12%
Subscriptions 0.8 0.8 - 0%
Other 2.5 2.4 0.1 4%
Other revenue 1.0 0.7 0.3 43%
-----
Total Revenue 41.6 43.5 (1.9) (4)%
---------------------------- ----- ----- ------- -------
The revenue environment has remained challenging with a
significant slowdown in the UK economy impacting consumer
confidence, driven by rising inflation and interest rates . Revenue
decline of 4% year-on-year reflects an 8% fall in the first quarter
and flat 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.
Advertising revenue decreased by 13% period-on-period with a
fall of 16% in the first quarter and a decline of 9% in the second
quarter. The weakening of the UK economy has impacted all National,
Local and MSC categories.
Circulation revenue fell by 10% during the period with a decline
of 11% in the first quarter and a decline of 7% in the second
quarter. Average monthly circulation volumes in the period were 1.5
million for the daily newspapers and 0.8 million for the weekly
newspapers representing an annual decline of 18% and 12%
respectively. The second quarter circulation volumes for daily
newspapers fell compared to the first quarter by 5% and weekly
newspapers increased by 2%. The impact of falling volumes was
partially mitigated by cover price increases in the first quarter,
in addition to titles acquired in the period which contributed
GBP0.2 million revenue in the first half.
The Group continues to have a strong print subscriber base with
print subscription revenue of GBP1.5 million in the period, a
decline of 4% year-on-year which is lower than the overall
circulation revenue decline of 10%.
Other print revenue, which includes syndication, leaflets,
events ticket sales and other sundry revenues grew by 57% bolstered
by the acquisition of Insider Media Ltd.
Digital revenue
Digital revenue comprises all revenue sold programmatically,
digital-led direct sales, subscriptions, syndication and revenue
generated from the Google and Meta initiatives.
Digital revenue increased by 9% in the period, delivering a
strong first quarter with a growth of 11% and slowed in the second
quarter to 4%. The macroeconomic uncertainty has resulted in softer
advertising yields, and there is continued volatility in audience
numbers during the period. Video advertising continues to increase
with 67% growth year-on-year.
Digital Advertising revenue increased by 12%, with a strong
first quarter performance recording growth of 14% slowing to 9% in
the second quarter as we saw some softening of yields. Advertising
revenue is predominantly driven by audience and the Group had
average monthly Pages Views (PVs) 141 million, representing
year-on-year growth of 21%.
Digital Subscription revenue remained flat year-on-year despite
an 11% reduction in subscribers. Premium brand subscribers to the
Scotsman, the Yorkshire Post, and the Newsletter increased by 5%
since the year-end, with total subscribers for our websites and
apps decreasing by 3% to 19k since the year-end driven by price
rises in H2 2022 and moving from a subscriber to audience (page
views) led focus across a number of titles.
Other digital revenue grew by 4% and includes contracts for both
Meta and Google content.
Other revenue
Other revenue increased by 43% reflecting grants from the BBC
for local democracy reporters and from Meta for the funding of 60
journalists (2022: 45 journalists).
Operating Costs
Operating costs comprise:
Adjusted results Statutory results
2023 2022 2023 2022
GBPm GBPm GBPm GBPm
------------------------------------------- ---------- --------- ---------- -------
Labour 21.3 21.1 21.3 21.1
Newsprint and production costs 6.4 6.4 6.4 6.4
Depreciation and amortisation 0.2 0.2 0.7 0.8
Other 10.8 10.1 10.6 9.8
Total operating cost before non-recurring
costs 38.7 37.8 39.0 38.1
------------------------------------------- ---------- --------- ---------- -------
Non-recurring costs - - 1.2 1.3
------------------------------------------- ---------- ----- -------------- -------
Total operating costs 38.7 37.8 40.2 39.4
------------------------------------------- ---------- ----- -------------- -------
Statutory operating costs increased by GBP0.8 million to GBP40.2
million (2022: GBP39.4 million) and increased by GBP0.9 million on
an adjusted basis to GBP38.7 million (2022: GBP37.8 million).
Adjusted costs are before non-recurring costs, amortisation of
intangible assets of GBP0.5 million, and impact of IFRS16.
Labour
The Group employed an average of 1,110 employees during the
period (2022: 1,179).
Newsprint and Production costs
Newsprint and production costs remained flat during the period.
Reductions in newsprint volumes (-18%) were primarily due to
decreased circulation and reduced pagination offset by increasing
pricing in newsprint (+16%) and printing (+7%). A reduction in
newsprint costs has been confirmed for the third quarter, with the
benefit expected to continue into the second half.
Depreciation and amortisation
Adjusted depreciation and amortisation, which excludes
amortisation of intangible assets and depreciation on Right of Use
assets, has remained at GBP0.2 million (2022: GBP0.2 million) as
capital expenditure continues to be tightly managed. Excluding
acquisitions, capital expenditure of GBP0.7 million in the period
related to IT equipment and digital development projects. We expect
capital expenditure of c.GBP1.5 million for the full year.
Statutory depreciation and amortisation fell by GBP0.1 million to
GBP0.7 million (2022: GBP0.8 million) due to lower Right of Use
assets depreciation charges across both property and motor
vehicles.
Other
Other costs comprise property, IT, digital product and
engineering, administration and other operating costs. Adjusted
other costs increased by GBP0.7 million to GBP10.8 million
reflecting costs associated with acquired businesses, digital and
IT investment, other inflationary increases as a result of the
current economic climate offset by lower IFRS16 lease costs as a
result of the 2022 property rationalisation.
Adjusted other costs of GBP10.8 million are GBP0.2 million
higher than Statutory other costs as they are before IFRS16 impact
(2022: GBP0.3 million of IFRS16 lease costs).
Non-recurring cost
Total non-recurring costs of GBP1.2 million (2022: GBP1.3
million) were expensed in the period, which includes:
-- GBP1.0 million Restructuring costs (2022: GBP1.3 million) for
the delivery of cost reduction measures, which will generate
in-year savings of GBP1.1 million and annualised savings of GBP2.5
million. For the full year, total restructuring costs of c.GBP2.0
million are expected, delivering combined annualised costs savings
of c.GBP4 million.
-- GBP0.2 million on transaction costs, including GBP0.1 million
to acquire Insider Media Limited and its subsidiaries, and GBP0.1
million on other speculative transactions.
Finance income and charges
Financing (income) and charges on a statutory and adjusted basis
are:
Adjusted results Statutory results
2023 2022 2023 2022
GBPm GBPm GBPm GBPm
------------------------------------- -------- --------- ---------- -------
Interest income (0.4) - (0.4) -
Interest on unsecured loan notes 0.1 0.1 0.1 0.1
Interest on lease liabilities - - - 0.1
Total financing (income)/charge (0.3) 0.1 (0.3) 0.2
------------------------------------- -------- --------- ---------- -------
Net adjusted financing costs include GBP0.4 million interest
income earned from cash held on deposit with Barclays Bank,
attracting interest at the BOE base rate less 5 basis points (2022:
GBPnil), and interest expense of GBP0.1 million on the interest
only unsecured loan notes (2022: GBP0.1 million).
The GBP1.0 million interest only unsecured loan notes will
continue to accrue interest at 15% per annum. Interest is payable
in June and December each year until maturity and repayment on 31
December 2023.
Statutory finance expense includes GBPnil interest charge on
IFRS16 lease liabilities (2022: GBP0.1 million).
Profit before tax
Statutory profit before tax of GBP1.7 million (2022: GBP3.9
million) is after GBP1.2 million (2022: GBP1.3 million)
non-recurring costs.
Adjusted profit before tax of GBP3.2 million (2022: GBP5.6
million) is before non-recurring items, the impact of IFRS16 and
amortisation of intangible assets. The decline in profit before tax
reflects the challenging trading conditions and inflationary
pressures, with 4% revenue shortfall, and operating costs 2% higher
than the comparative.
Statutory tax charge and effective tax rate
The statutory tax rate for the period is a blended rate of
23.5%. A statutory tax charge of GBP0.4 million is recognised in
the period (25.9% effective tax rate). No tax payments have been
made in the period and no payments will be made for the remainder
of 2023, as the Group utilises brought forward tax losses against
taxable profits.
The adjusted profit before tax is GBP3.2 million, and the
adjusted tax rate is 24.0% with an adjusted tax charge in the
period of GBP0.8 million (2022: GBP1.1 million). The adjusted tax
charge provides a more meaningful and comparable financial
result.
Earnings per share
Statutory earnings per share for the period were 0.5 pence per
share (2022: 1.2 pence per share).
Adjusted earnings per share for the period were 0.9 pence per
share (2022: 1.7 pence per share).
Balance sheet
1 Jul 2023 31 Dec 2022
GBPm GBPm
------------------------- ----------- ------------
Non-current assets 20.3 16.9
Current assets 35.2 38.4
Total assets 55.5 55.3
-------------------------- ----------- ------------
Current liabilities (20.9) (20.5)
Non-current liabilities (0.6) (0.8)
Total liabilities (21.5) (21.3)
-------------------------- ----------- ------------
Net assets 34.0 34.0
-------------------------- ----------- ------------
Net assets of GBP34.0 million is consistent with the net assets
reported at the year-end with the GBP1.3m statutory profit after
tax for the period, offset by the dividend declared in the period
of GBP1.4 million relating to the prior year performance and the
GBP0.1m long term incentive share based payment charge.
Non-current assets
Goodwill has increased by GBP2.7 million to GBP7.9 million due
to the acquisition of Insider Media Limited in April 2023 (GBP2.6
million) and deferred tax liability recognised on acquired
publishing titles (GBP0.1 million). Intangible assets have
increased by GBP0.6 million to GBP5.7 million due to the
acquisition of the Rotherham publishing titles, and capitalisation
of digital development projects.
The net deferred tax asset decreased by GBP0.2 million to GBP4.0
million, with tax losses utilised against taxable profits in the
period offset by the acquisition of Insider Media Limited deferred
tax assets. Gross brought forward losses of GBP17.8 million (31
December 2022: GBP18.8 million) are recognised as a deferred tax
asset at the period-end, calculated using a blended corporate tax
rate of 25%. GBP2.2 million of tax losses remain unrecognised (31
December 2022: GBP2.2 million).
Current assets
Cash and cash equivalents of GBP22.1 million decreased by GBP4.9
million in the period. There were a number of significant one-off
cash outflows in the period, including the final deferred
consideration payment of GBP2.5 million for the 2021 acquisition of
JPIMedia Publishing Limited (renamed National World Publishing
Limited), GBP1.9 million net cash consideration for the five
acquisitions completed in the first half and GBP1.3 million payment
of 2022 restructuring costs accrued at year-end.
Current liabilities
Trade and other payables of GBP18.8 million (2022: GBP15.9
million) increased by GBP2.9 million in the period driven by GBP1.4
million dividend payable due to shareholders on 5 July 2023, GBP1.0
million increase in payables relating to Cloud and production costs
and increase in deferred revenue due to acquiring Insider Media
Limited.
Deferred Consideration has reduced to nil as the final payment
of GBP2.5 million was paid on 31 March 2023 to JPIMedia
Limited.
Current provisions fell by GBP0.1 million to GBP0.5 million as
GBP0.1 million was utilised in the period for onerous IT
contracts.
Non-current liabilities
Right of Use lease liabilities have reduced by GBP0.1 million to
GBP0.2 million as the majority of property leases expiring are
replaced by serviced office space on short term contracts.
Non-current provisions decreased by GBP0.1 million to GBP0.4
million due to GBP0.2 million dilapidation provisions becoming due
in the next 12 months, offset by Insider Media Limited GBP0.1
million of dilapidations provision acquired relating to occupied
offices.
Key Performance Indicators
To monitor progress against the Group's strategy the Board set
four Key Performance Indicators ("KPIs"), for 2023, and performance
against these for the first half is set out below:
-- Digital audience. Grow digital audience (page views) with a
target of c.200 million average monthly page views by the end of
2023.
21% year-on-year improvement in average monthly page views
reported in the first half, with the Group achieving average
monthly page views of 141 million, compared to 117 million in the
prior period.
-- Revenue trends. Improve revenue trends with KPIs that monitor
a transition from dependency on print sales to an increasing
percentage of Group revenue from digital beyond the 15% achieved in
2022.
Strong growth in digital revenue of 9% and other revenue growth
of 43% was offset by an 8% decline in print revenue. The growth in
digital revenue was achieved despite lower yields, with growth seen
in audience and video revenue. Digital revenue represented 21% of
Group revenue, representing an improvement on the 2% on the first
half of 2022.
-- EBITDA margin of at least 10%. Adjusted EBITDA margin of 7%,
is below the target and 2022 comparative of 14%. The Group expects
to report a c10% EBITDA margin in the full year results.
-- Strong cash generation to provide financial flexibility and
headroom for investment. The Group's cash balance reduced by GBP4.9
million from GBP27.0 million to GBP22.1 million after paying the
final GBP2.5 million deferred consideration on the acquisition of
JPI Media Publishing Limited (renamed National World Publishing
Limited) and GBP1.9 million on acquisitions. Net of the GBP1.0
million outstanding loan note due in December, and the GBP1.4
million dividend payable on 5 July to shareholders net cash of
GBP19.7 million provides significantly financial flexibility and
headroom for investment.
Cash flow
Adjusted Statutory
H1 2023 H1 2022 H1 2023 H1 2022
GBPm GBPm GBPm GBPm
----------------------------------- -------- -------- -------- --------
Operating profit for the period 2.9 5.7 1.4 4.1
Depreciation and amortisation
charges 0.2 0.2 0.7 0.8
Restructuring costs paid (1.4) (0.9) - -
Long term incentive plan expense 0.1 - 0.1 -
Changes in provisions - - (0.3) (0.6)
Changes in working capital (1.8) 0.5 (1.6) 2.0
Net cash inflow from operating
activities 0.0 5.5 0.3 6.3
----------------------------------- -------- -------- -------- --------
Net cash outflow from investing
activities (4.8) (2.7) (4.8) (2.7)
----------------------------------- -------- -------- -------- --------
Financing activities
Interest paid (0.1) (0.1) (0.1) (0.1)
Principal repayment of leases - - (0.3) (0.8)
----------------------------------- -------- -------- -------- --------
Net cash generated from financing
activities (0.1) (0.1) (0.4) (0.9)
----------------------------------- -------- -------- -------- --------
Net decrease in cash and cash
equivalents (4.9) 2.7 (4.9) 2.7
Cash and cash equivalents at the
beginning of the period 27.0 23.0 27.0 23.0
Cash and cash equivalents at
the end of the period 22.1 25.7 22.1 25.7
----------------------------------- -------- -------- -------- --------
Cash inflow from operating activities of GBP0.3m is after GBP1.4
million of restructuring costs paid of which GBP1.3 million were
expensed to the 2022 Income Statement.
The conversion of adjusted operating profit of GBP2.9 million
into cash is 39% (GBP1.1 million comprising cash inflow from
operating activities before restructuring cost paid, and after
purchases of tangible assets).
At the period-end the Group maintains a substantial cash balance
and retains financial flexibility. As at 1 July 2023, the Company
held GBP22.1 million (2022: GBP25.7 million) of cash. The Group had
some notable cash outflows in the first half, with cash decreasing
by GBP4.9 million since the year-end including t he final deferred
consideration payment of GBP2.5 million for the 2021 acquisition of
JPIMedia Publishing Limited (renamed National World Publishing
Limited), GBP1.9 million net cash consideration for the five
acquisitions completed in the first half, capital expenditure
(GBP0.7 million), loan note interest (GBP0.1 million) and capital
payments on IFRS16 leases (GBP0.3 million) and supplier payments
made in advance to access discounts.
Capital Expenditure
Capital expenditure during the period includes GBP0.5 million of
digital development project costs and GBP0.2 million expenditure on
IT equipment, predominantly laptops and video equipment. For 2023,
capital expenditure is expected to be c.GBP1.5 million including
digital development costs and certain systems and remaining IT
equipment requiring replacement as it approaches the end of its
useful life. Beyond 2023, capital expenditure is expected to be
limited to c.GBP1.0 million per annum.
Dividends
Shareholders approved the Group's maiden dividend at the 24 May
2023 AGM of 0.5 pence per share. This was paid on 5 July 2023 to
shareholders on the register at 2 June 2023, and is held as a
liability at the period-end. The maiden 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. In July revenues have
increased by 2% year on year and the company is poised to benefit
in the second half from at least three of its key elements - the
acquired businesses, new launches and relaunches of heritage brands
and video and TV expansion. Therefore the Board confirms its view
that the business will perform in line with 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 29 to 31 of National
World plc's Annual Report for the period ended 31 December 2022
which is available on the Company's website. These risks are as
follows: strategy, cyber security and data migration,
infrastructure and operations, and data protection.
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 31 December 2022. 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 31 December
2022 and again when approving National World plc's Half-yearly
Financial Report for the 26 week period ended 1 July 2023. Further
information is set out in the 2022 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 2023. 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:
-- 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 GBP22.1 million cash held as
at 1 July 2023, 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 interim report.
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
David Lindsay was appointed to the Board, as a Non-Executive
Director, on 14 September 2022.
John Rowe was appointed to the Board, as an Executive Director,
on 24 February 2023.
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
David Montgomery
Executive Chairman
31 July 2023
Condensed consolidated income statement
for the 26 weeks ended 1 July 2023 (26 weeks ended 2 July 2022
and the 52 weeks ended 31 December 2022)
26 weeks 26 weeks
ended ended 52 weeks ended
1 Jul 23 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
---------------------------------- ------ ------------ ------------ ---------------
Continuing operations
Revenue 5 41.6 43.5 84.1
Cost of sales (31.5) (32.0) (63.5)
Gross profit 10.1 11.5 20.6
---------------------------------- ------ ------------ ------------ ---------------
Operating expenses before
non-recurring items (7.5) (6.1) (11.7)
Non-recurring items: 6
Restructuring and redundancy
costs (1.0) (1.3) (3.3)
Transaction costs (0.2) - (0.3)
ROUA impairment - - (0.1)
Total operating expenses (8.7) (7.4) (15.4)
---------------------------------- ------ ------------ ------------ ---------------
Operating profit 1.4 4.1 5.2
---------------------------------- ------ ------------ ------------ ---------------
Financing
Finance costs 7 (0.1) (0.2) (0.3)
Interest income 8 0.4 - 0.2
Net finance income/(expense) 0.3 (0.2) (0.1)
---------------------------------- ------ ------------ ------------ ---------------
Profit before tax 1.7 3.9 5.1
---------------------------------- ------ ------------ ------------ ---------------
Tax credit/(charge) 9 (0.4) (0.8) 0.1
Profit after tax from continuing
operations 1.3 3.1 5.2
---------------------------------- ------ ------------ ------------ ---------------
Earnings per share 10
---------------------------------- ------ ------------ ------------ ---------------
Earnings per share - basic 0.5p 1.2p 2.0p
Earnings per share - diluted 0.5p 1.1p 1.9p
---------------------------------- ------ ------------ ------------ ---------------
Note 10 sets out the calculation of adjusted earnings per share
and Note 20 presents a reconciliation between the statutory and
adjusted results.
Condensed consolidated statement of comprehensive income
for the 26 weeks ended 1 July 2023 (26 weeks ended 2 July 2022
and the 52 weeks ended 31 December 2022)
26 weeks
26 weeks ended ended 52 weeks ended
1 Jul 23 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------------- --- ----------------- ------------ ---------------
Profit for the period 1.3 3.1 5.2
Total other comprehensive profit
for the period - - -
------------------------------------------ ----------- ------------ ---------------
Total comprehensive profit for
the period 1.3 3.1 5.2
------------------------------------ ----------------- ------------ ---------------
Condensed consolidated statement of financial position
At 1 July 2023
As at As at As at
1 Jul 23 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
----------------------------- ------ ------------ ------------ -----------
Non-current assets
Goodwill 7.9 5.2 5.2
Intangible assets 11 5.7 5.0 5.1
Tangible assets 12 1.0 0.8 0.9
Investments 1.1 - 1.1
Right of use assets 13 0.6 0.8 0.4
Deferred tax 4.0 3.3 4.2
----------------------------- ------ ------------ ------------ -----------
20.3 15.1 16.9
Current assets
Inventory 0.1 - 0.1
Trade and other receivables 13.0 13.1 11.3
Cash and cash equivalents 22.1 25.7 27.0
----------------------------- ------ ------------ ------------ -----------
35.2 38.8 38.4
Total assets 55.5 53.9 55.3
----------------------------- ------ ------------ ------------ -----------
Current liabilities
Trade and other payables (18.8) (15.8) (15.9)
Borrowings 14 (1.0) - (1.0)
Lease liabilities 13 (0.6) (0.8) (0.5)
Deferred consideration - (2.5) (2.5)
Provisions 15 (0.5) (0.9) (0.6)
----------------------------- ------ ------------ ------------ -----------
(20.9) (20.0) (20.5)
Non-current liabilities
Borrowings 14 - (1.0) -
Lease liabilities 13 (0.2) (0.4) (0.3)
Provisions 15 (0.4) (0.6) (0.5)
----------------------------- ------ ------------ ------------ -----------
(0.6) (2.0) (0.8)
Total liabilities (21.5) (22.0) (21.3)
----------------------------- ------ ------------ ------------ -----------
Net assets 34.0 31.9 34.0
----------------------------- ------ ------------ ------------ -----------
Equity
Share capital 17 0.3 0.3 0.3
Share premium 17 27.4 24.6 24.6
Retained earnings and other
reserves 17 6.3 7.0 9.1
Total equity 34.0 31.9 34.0
----------------------------- ------ ------------ ------------ -----------
Condensed consolidated statement of changes in equity
for the 26 weeks ended 1 July 2023 (26 weeks ended 2 July 2022
and the 52 weeks ended 31 December 2022)
Retained
earnings
Share Share and Other Total
capital premium reserves equity
Notes GBPm GBPm GBPm GBPm
--------------------------------------- ------ --------- --------- ----------- --------
Equity as at 31 December 2022
(audited) 0.3 24.6 9.1 34.0
Issue of new ordinary shares 17 - 2.8 (2.8) -
Long-term incentive share based
payments charge 18 - - 0.1 0.1
Dividend payable to shareholders
on 5 July 2023 - - (1.4) (1.4)
Profit for the period - - 1.3 1.3
Total comprehensive profit / (loss)
for the period - 2.8 (2.8) -
Equity as at 1 July 2023 (unaudited) 0.3 27.4 6.3 34.0
--------------------------------------- ------ --------- --------- ----------- --------
Equity as at 1 January 2022 (audited) 0.3 24.6 3.9 28.8
Profit for the period - - 3.1 3.1
Total comprehensive profit for
the period - - 3.1 3.1
Equity as at 2 July 2022 (unaudited) 0.3 24.6 7.0 31.9
--------------------------------------- ------ --------- --------- ----------- --------
Equity as at 1 January 2022 (audited) 0.3 24.6 3.9 28.8
Profit for the period - - 5.2 5.2
Total comprehensive profit for
the period - - 5.2 5.2
Equity as at 31 December 2022
(audited) 0.3 24.6 9.1 34.0
--------------------------------------- ------ --------- --------- ----------- --------
Condensed consolidated cash flow statement
for the 26 weeks ended 1 July 2023 (26 weeks ended 2 July 2022
and the 52 weeks ended 31 December 2022)
26 weeks 26 weeks 52 weeks
ended ended ended
1 Jul 23 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
------------------------------------- ------ ------------ ------------ -----------
Cash flow from operating activities 16 0.3 6.3 9.5
Net cash inflow from operating
activities 0.3 6.3 9.5
------------------------------------- ------ ------------ ------------ -----------
Investing activities
Deferred consideration 19 (2.5) (2.5) (2.5)
Acquisition of subsidiaries 19 (1.4) - (0.1)
Investment in The News Movement - - (1.1)
Interest earned 8 0.4 - 0.2
Intangible assets purchases
and acquisition 11 (1.0) - (0.2)
Tangible assets purchases
and acquisition 12 (0.3) (0.2) (0.4)
Net cash outflow from investing
activities (4.8) (2.7) (4.1)
------------------------------------- ------ ------------ ------------ -----------
Financing activities
Interest paid 7 (0.1) (0.1) (0.2)
Capital repayments of lease
payments 13 (0.3) (0.7) (1.1)
Interest element of lease
rental payments 7 - (0.1) (0.1)
Net cash generated from financing
activities (0.4) (0.9) (1.4)
------------------------------------- ------ ------------ ------------ -----------
Net (decrease)/increase in
cash and cash equivalents (4.9) 2.7 4.0
Cash and cash equivalents
at the beginning of the period 27.0 23.0 23.0
Cash and cash equivalents
at the end of the period 22.1 25.7 27.0
------------------------------------- ------ ------------ ------------ -----------
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 No 1 Leeds 4th Floor, 26 Whitehall Road, Leeds, England,
United Kingdom, LS12 1BE.
The principal activity of the Company is to operate in the news
publishing sector.
The condensed consolidated Interim Financial Statements of the
Company and its subsidiaries for the 26-week period ended 1 July
2023 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 31 December 2022
were approved by the Board of Directors on 16 March 2023 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 31 December
2022 is extracted from National World plc's financial statements
for that year. 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, as adopted by the United Kingdom.
The half-yearly financial report was approved by the Directors
on 31 July 2023. This announcement is available at the Company's
registered office at No 1 Leeds 4th Floor, 26 Whitehall Road,
Leeds, England, United Kingdom, LS12 1BE 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 31 July 2023.
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
million 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. Significant 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 www.nationalworldplc.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
None of the standards which have been issued by the UK
Endorsement Board but are not yet effective are 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 1 July 2023.
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.
Business combinations
The acquisition of subsidiaries is accounted for using the
acquisition method. The cost of the acquisition is measured at the
aggregate of the fair values at the date of exchange of assets
given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree.
Acquisition related costs are recognised in the Income Statement as
incurred.
The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3,
including publishing titles, are recognised at their fair value at
the acquisition date.
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 20 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 20.
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
Valuation judgements
Acquisitions
On 7 February 2023 the Group acquired Bann Media Limited and on
28 April 2023 the Company acquired Insider Media Limited and its
subsidiary. Both acquisitions have been treated as a business
combination under IFRS 3, refer to Note 19.
Impairment of publishing titles
The Group is required to test whether intangible and tangible
assets have suffered any impairment based on the recoverable amount
of its CGUs, when there are indicators for impairment. Determining
whether the regional business is impaired requires an estimation of
the value in use of the CGU to which these assets are allocated.
Key sources of estimation uncertainty in the value in use
calculation include the estimation of future cash flows of the CGU
affected by expected changes in underlying revenues and direct
costs as well as corporate and central cost allocations through the
forecast period, the long-term growth rates and a suitable discount
rate to apply to the aforementioned cash flows in order to
calculate the net present value.
5. Revenue
The analysis of the Group's contracted revenue for the period
from continuing operations is as follows:
26 weeks ended 26 weeks ended 52 weeks ended
1 Jul 23 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------- --------------- --------------- ---------------
Print revenue 31.7 34.6 66.3
Digital revenue 8.9 8.2 16.3
Other(1) 1.0 0.7 1.5
Total revenue 41.6 43.5 84.1
------------------ --------------- --------------- ---------------
(1) Includes Local Democracy Reporting Service funding from the
BBC and Meta to support news coverage of top-tier local authorities
and other public service organisations.
6. Non-recurring costs
Profit for the period is after the following items that are
unusual because of their nature, size or incidence:
26 weeks 26 weeks 52 weeks
ended ended ended
1 Jul 23 2 Jul 22 31 Dec22
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
--------------------------- --- ------------ ------------ ----------
Non-recurring costs
Restructuring a 1.0 1.3 3.3
Transaction costs b 0.2 - 0.3
Property rationalisation c - - 0.1
Total non-recurring costs 1.2 1.3 3.7
-------------------------------- ------------ ------------ ----------
a) Restructuring costs
Restructuring costs of GBP1.0 million have been expensed in the
period and relate predominantly to severance (H1 2022: GBP1.3
million, FY2022: GBP3.3 million).
b) Transaction costs
In the period, GBP0.1 million professional advisory fees were
incurred in relation to the successful acquisition of Insider Media
Limited and its subsidiary Newsco Insider Limited. A further GBP0.1
million was incurred in the period in relation to other speculative
transactions. In the prior year, GBP0.3 million of professional
advisory fees were incurred in relation to the aborted acquisition
of Reach plc.
c) Property rationalisation
The prior year charge relates to the right of use asset
impairment of the Preston office which was exited as the business
continued to adopt a flexible working policy.
7. Finance costs
26 weeks
ended 1 Jul 26 weeks ended 52 weeks ended
23 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
GBP'm GBPm GBPm
------------------------------------- ------------- --------------- ---------------
Interest on interest only unsecured
loan notes 0.1 0.1 0.2
Interest on lease liabilities - 0.1 0.1
Total finance costs 0.1 0.2 0.3
------------------------------------- ------------- --------------- ---------------
Interest is being accrued at 15% on GBP1.0 million of interest
only unsecured loan notes, which are repayable on 31 December
2023.
8. Interest Income
26 weeks
ended 1 Jul 26 weeks ended 52 weeks ended
23 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
GBP'm GBPm GBPm
----------------------- ------------- --------------- ---------------
Interest Income 0.4 - 0.2
Total Interest Income 0.4 - 0.2
----------------------- ------------- --------------- ---------------
9. Tax
Income tax credit/(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 2023 is 23.5%, a blended rate due to change in
corporation tax rate on 1 April 2023 increasing from 19% to
25%.
The change to the standard rate of corporation tax rate to 25%,
substantively enacted by parliament in May 2021, has been accounted
for in the calculation of the deferred tax.
52 weeks
26 weeks 26 weeks ended
ended ended 31 Dec
1 Jul 23 2 Jul 22 22
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------------------- ------------ ------------ ----------
Profit before tax 1.7 3.9 5.1
Tax at the UK corporation tax rate
of 23.5% (2022: 19%) (0.4) (0.7) (1.0)
Effects of:
Expenses not allowable - (0.1) -
Deferred tax asset recognised for
tax losses - - 0.9
Effect of increase in deferred tax
rate to 25% - - 0.2
Adjustment relating to acquired balance - - -
Total tax credit / (charge) for
the period (0.4) (0.8) 0.1
------------------------------------------ ------------ ------------ ----------
Effective tax rate 26% 21% 2%
------------------------------------------ ------------ ------------ ----------
At the period-end the Group has total tax losses carried forward
of GBP20.0 million of which GBP17.8 million are recognised as a
deferred tax asset at the period-end (31 December 2022: GBP18.8
million, 2 July 2022: GBP15.8 million), calculated using a blended
corporate tax rate of 25% (31 December 2022: 25%, 2 July 2022:
24%). The Group expects the losses will be utilised over the next
three years.
The remaining tax losses of GBP2.2 million have not been
recognised as a deferred tax asset due to uncertainty over the
timing of future profits and gains. (31 December 2022: GBP2.2
million, 2 July 2022: GBP22.3 million).
The deferred tax balance has decreased by GBP0.2 million to
GBP4.0 million at the period end. The movement reflects GBP0.3
million of deferred tax assets acquired on the Insider Media
business combination (Note 19) offset by GBP0.1 million deferred
tax liability arising on acquired publishing title assets, and
GBP0.4 million of tax losses utilised in the period against taxable
profits.
10. Earnings per share
Basic earnings per share is calculated by dividing earnings 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 26 weeks ended 52 weeks ended
1 Jul 23 2 Jul 22 31 Dec 22
(unaudited)
(1) (unaudited) (audited)
m m m
------------------------------------- ------------ --------------- ---------------
Weighted average number of ordinary
shares for basic earnings per
share 262 259 259
Effect of dilutive ordinary
shares in respect of unexercised
/ potential share awards under
the value creation plan 4 16 16
Weighted average number of
ordinary shares for diluted
earnings per share 266 275 275
-------------------------------------- ------------ --------------- ---------------
Pence Pence Pence
------------------------------------- ------------ --------------- ---------------
Statutory earnings per share
Earnings per share - basic 0.5 1.2 2.0
Earnings per share - diluted 0.5 1.1 1.9
Adjusted earnings per share
Earnings per share - basic 0.9 1.7 2.9
Earnings per share - diluted 0.9 1.6 2.7
-------------------------------------- ------------ --------------- ---------------
(1) 12.7m new ordinary shares were issued on 3 May 2023 to
satisfy the value creation plan award, of which 4.3m share options
remain unexercised at the period end (Note 17).
11. Intangible Assets
Publishing Digital
titles - intangible Total Intangible
Note Regional assets assets
GBPm GBPm GBPm
------------------------------------------------ ------- ----------- ------------ -----------------
Cost
At 31 December 2022 (audited) 5.3 0.8 6.1
Acquisitions / Acquisitions of subsidiaries 19 0.5 - 0.5
Additions - 0.5 0.5
At 1 July 2023 5.8 1.3 7.1
------------------------------------------------ ------- ----------- ------------ -----------------
Accumulated impairment losses and
depreciation
At 31 December 2022 (audited) (0.8) (0.2) (1.0)
Charge for the period (0.2) (0.2) (0.4)
At 1 July 2023 (1.0) (0.4) (1.4)
Carrying amount
At 31 December 2022 (audited) 4.5 0.6 5.1
At 1 July 2023 4.8 0.9 5.7
------------------------------------------------ ------- ----------- ------------ -----------------
Acquisitions in the period, totalling GBP0.5m include:
-- Newry Reporter (acquired January 2023);
-- Banbridge Chronicle (acquired February 2023) (Note 19);
-- the Rotherham Advertiser, Dearne Valley Weekend and The Chase
titles (acquired on 28 April 2023).
These acquisitions will complement and expand the reach of the
Group in Northern Ireland and Yorkshire, respectively.
Digital intangible asset additions include the capitalisation of
external development costs which form part of the core platform for
the Group's Editorial and Sales functions.
12. Tangible assets
Tangible
Note assets
GBPm
------------------------------- ------- ---------
Cost
At 31 December 2022 (audited) 1.7
Acquisitions of subsidiary 19 0.1
Additions 0.2
Disposals (0.1)
--------------------------------- ------- ---------
At 1 July 2023 1.9
--------------------------------- ------- ---------
Accumulated depreciation
At 31 December 2022 (audited) (0.8)
Charge for the period (0.2)
Disposals 0.1
--------------------------------- ------- ---------
At 1 July 2023 (0.9)
Carrying amount
At 31 December 2022 (audited) 0.9
At 1 July 2023 1.0
--------------------------------- ------- ---------
The tangible assets are depreciated over their useful lives. The
additions in the period relate to IT hardware including video
equipment purchased for the Group's Editorial function.
13. Leases
The Group leases office buildings and motor vehicles for use in
its business operations. Leases of offices generally have terms of
between two and 10 years, with longer period leases having a break
clause after year five. Motor vehicles generally have a term of
four 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
Note Property Motor Vehicles Total
GBPm GBPm GBPm
------------------------------------ ----- --------- --------------- ------
Carrying amount at 31 December
2022 (audited) 0.2 0.2 0.4
Acquisition of subsidiaries 19 0.2 0.1 0.3
------------------------------------ ----- --------- --------------- ------
Depreciation charge for the period (0.1) - (0.1)
------------------------------------ ----- --------- --------------- ------
Carrying amount at 1 July 2023
(unaudited) 0.3 0.3 0.6
------------------------------------ ----- --------- --------------- ------
Right of use liabilities
The carrying amounts of lease liabilities and the movements
during the period are set out below:
Note Property Motor Vehicles Total
GBPm GBPm GBPm
-------------------------------- ----- --------- --------------- ------
Carrying amount at 31 December
2022 (audited) 0.7 0.1 0.8
Acquisition of subsidiaries 19 0.2 0.1 0.3
Lease payments (0.3) - (0.3)
Carrying amount at 1 July 2023
(unaudited) 0.6 0.2 0.8
-------------------------------- ----- --------- --------------- ------
The carrying amounts of lease liabilities at the period end is
set out below:
26 weeks 26 weeks 52 weeks
ended ended ended
1 Jul 23 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------- ------------ ------------ -----------
Current liabilities (0.6) (0.8) (0.5)
Non-current liabilities (0.2) (0.4) (0.3)
Total (0.8) (1.2) (0.8)
-------------------------- ------------ ------------ -----------
14. Borrowings
26 weeks 26 weeks 52 weeks
ended ended ended
1 Jul 23 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
----------------------------- ------- ------------ ------------ -----------
Balance at the beginning of
the period 1.0 1.0 1.0
Net book amount at the end of
the period 1.0 1.0 1.0
-------------------------------------- ------------ ------------ -----------
Borrowings at 1 July 2023 comprises GBP1.0 million 15% interest
only unsecured loan notes, repayable on 31 December 2023.
15. Provisions
Onerous IT Property Dilapidations Total
contracts rationalisation
-------------------------------
GBPm GBPm GBPm GBPm
------------------------------- ----------- ----------------- -------------- ------
At 31 December 2022 (audited) 0.1 0.4 0.6 1.1
Utilised in the period (0.1) (0.2) - (0.3)
Acquisition of subsidiaries
(Note 19) - - 0.1 0.1
At 1 July 2023 (unaudited) - 0.2 0.7 0.9
-------------------------------- ----------- ----------------- -------------- ------
Current provision - 0.2 0.3 0.5
Non-current provision - - 0.4 0.4
-------------------------------- ----------- ----------------- -------------- ------
Total provision at 1
July 2023 - 0.2 0.7 0.9
-------------------------------- ----------- ----------------- -------------- ------
Onerous IT contracts
The Onerous IT contracts provision was fully utilised in the
period. The GBP0.7m provision that was charged in 2021 in relation
to the remaining obligations over the unexpired term of remaining
contract obligations on IT Infrastructure which overlaps with the
transition to Cloud computing.
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 acquisition of Insider Media Limited included GBP0.1m of
leasehold property dilapidation provisions in relation to various
occupied offices.
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 26 weeks 52 weeks
ended ended ended
1 Jul 2 Jul 22 31 Dec
23 22
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
---------------------------------------- ------ ------------ ------------ ----------
Operating profit 1.4 4.1 5.2
Adjustments for non-cash/non-operating
items:
Amortisation of intangible assets 11 0.4 0.3 0.5
ROUA and tangible assets depreciation
expense 12,13 0.3 0.5 1.0
Long term incentive plan expense 18 0.1 - -
ROUA impairment - - 0.1
Operating cash flow before working
capital changes 2.2 4.9 6.8
Net (decrease)/increase in provisions 15 (0.3) (0.6) (1.0)
---------------------------------------- ------ ------------ ------------ ----------
1.9 4.3 5.8
Changes in working capital:
(Increase)/decrease in receivables (1.1) (0.2) 1.6
Increase/(decrease) in payables (0.5) 2.2 2.1
Cash generated from operations 0.3 6.3 9.5
---------------------------------------- ------ ------------ ------------ ----------
17. Share capital and reserves
26 weeks 26 weeks 52 weeks
ended ended ended
1 Jul 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------- ------------ ------------ -----------
Share capital 0.3 0.3 0.3
Share premium 27.4 24.6 24.6
Retained earnings and other
reserves 6.3 7.0 9.1
------------------------------ ------------ ------------ -----------
34.0 31.9 34.0
----------------------------- ------------ ------------ -----------
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.
At 1 July 2023, 8,231,186 of new Ordinary share options have
been 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 on 5 July 2023, in accordance with the rules of the
VCP.
All 267,663,987 shares in issue rank equally for voting
purposes, on any dividend declared and distributions made on
winding up of the Company (2022: 259,432,801).
Value creation plan ("VCP")
The VCP was put in place on Admission in September 2019. The
overall effect of the VCP is that the three founding Executive
directors together were able to earn Ordinary Shares equivalent in
value to 10% of any equity value created above an 8% compound
annual growth rate based on the measurement of absolute total
shareholder return generated over the VCP performance period
commencing on listing (September 2019) and ending on the date of
publication of the Company's results for the financial year ending
31 December 2022.
On 17 April 2023, 12,663,363 awards in the form of nominal cost
options over new ordinary shares vested pursuant to the terms of
the 2019 VCP. The VCP award was calculated using the average share
price of 22.12p determined over the 20 day testing period ending on
17 April 2023.
The Group recognised a GBP2.8 million increase in share premium
in the period ended 1 July 2023 in relation to the VCP, and a
corresponding decrease in reserves of GBP2.8 million in the same
period.
The founding directors vested shares and values on the 17 April
2023, which they were entitled to, were as follows:
Shares options Value
GBP
D Montgomery 4,432,177 980,242
V Vaghela 4,432,177 980,242
M Hollinshead 3,799,009 840,208
--------------- --------------- ----------
Total 12,663,363 2,800,692
--------------- --------------- ----------
At 1 July 2023, 8,231,186 of new Ordinary share options have
been exercised. The remaining 4,432,177 of new Ordinary share
options remain unexercised however were entitled to dividend
equivalents payable on 5 July 2023, in accordance with the rules of
the VCP.
18. Share Based Payments
Long term incentive plan 2022 & 2023
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 GBP40k in
the period ended 1 July 2023 in relation to LTIP 2022 (2022:
GBPnil).
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 GBP0.1m in the period ended 1
July 2023 in relation to LTIP 2023 (including the conditional bonus
arrangement).
19. Business Combinations
In 2023, the Group has acquired 100% of the issued share capital
of the following Companies:
Country Fair value Acquisition Nature of business Acquiring entity
of of net assets Date
incorporation at
and operation acquisition
date
GBPm
Northern 0.0 7 February Newspaper publishers National World
Bann Media Limited Ireland 2023 Publishing Limited
(a)
Insider Media England (0.1) 28 April B2B Media
Limited and 2023 National World
Newsco Insider plc
Limited (b)
--------------------- --------------- --------------- ------------ --------------------- --------------------
Each acquisition meets the definition of a business combination
and has been accounted for using the acquisition accounting method
in accordance with the Group's accounting policies.
(a) Bann Media Limited was acquired on 7 February 2023, and owns
and operates Banbridge Chronicle newspaper title and website. The
fair value of acquired net assets (intangible assets - publishing
title, Note 11), totalling GBP40k, is the same as the acquisition
price paid.
(b ) Insider Media Limited and its subsidiary Newsco Insider
Limited were acquired on the 28 April 2023. All the assets and
liabilities of the company were acquired. Insider is the UK's
leading regional B2B media company that has built up, over 33
years, a loyal following of its business-orientated magazines and
events, daily business newsletters and business information. Cash
consideration of GBP2.5 million was paid on completion, with
GBP1.1m cash acquired on acquisition, before a dvisory and legal
fees of GBP0.1 million incurred relating to the Insider Media
Limited acquisition.
The acquisitions represent a growth opportunity for National
World, with synergies realised across the combined Group with
opportunities for audience expansion.
The provisional fair value of the assets and liabilities
recognised as a result of the acquisitions are as follows:
Insider
Media Limited Bann Media Total
Notes & subsidiary Limited acquisitions
GBPm GBPm GBPm
-------------------------------------- ------ --------------- ----------- ---------------
Working capital (0.4) - (0.4)
Tangible assets 12 0.1 - 0.1
Right of use assets 13 0.3 - 0.3
Right of use liabilities 13 (0.3) - (0.3)
Dilapidation provision 15 (0.1) - (0.1)
Deferred tax asset 9 0.3 - 0.3
-------------------------------------- ------ --------------- ----------- ---------------
Fair value of assets and liabilities
acquired - provisional (0.1) 0.0 (0.1)
-------------------------------------- ------ --------------- ----------- ---------------
Goodwill 2.6 0.0 2.6
-------------------------------------- ------ --------------- ----------- ---------------
Total initial consideration 2.5 0.0 2.5
-------------------------------------- ------ --------------- ----------- ---------------
Total cash consideration of GBP2.5 million was paid for the
Insider Media Limited and Bann Media Limited acquisitions, with no
deferred or conditional consideration applicable.
For the period of ownership during the six month period ended 1
July 2023, Insider Media and the Banbridge Chronicle contributed
Revenue of GBP1.6 million and Adjusted EBITDA of GBP0.3
million.
Other acquisitions completed in H1 2023
The Group completed three asset purchase acquisitions in H1 2023
which do not meet the criteria of business combinations. The Group
acquired Newry Reporter, Farm Week and Rotherham Advertiser titles
for combined cash consideration of GBP0.4m (Note 11), with the
assets disclosed as acquired intangible asset - publishing titles
in the period.
Total cash consideration paid for all five acquisitions
completed in H1 2023 (share and asset purchases) totalled GBP3.0
million, excluding GBP1.1 million cash acquired from the Insider
Media acquisition. Total legal and advisory costs incurred in
respect of all acquisitions completed in H1 was GBP0.1 million
(Note 6). For the period of ownership during the six month period
ended 1 July 2023, the revenue included in the Income Statement for
all acquisitions was GBP2.0 million Revenue and Adjusted EBITDA of
GBP0.3 million.
JPIMedia Group acquisition - Deferred consideration
The GBP2.5m million deferred consideration was paid to the
former owners JPIMedia Limited on 31 March 2023, representing the
second and final tranche due and there are no further amounts
payable relating to the JPIMedia Group acquisition.
20. 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 52 weeks
26 weeks ended ended ended
1 Jul 23 2 Jul 22 31 Dec 22
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
----------------------------------- ------ --------------- ------------ -----------
Operating profit as determined
under IFRS 1.4 4.1 5.2
Adjustments:
Lease costs (0.2) (0.3) (0.7)
Depreciation on right of use
assets 13 0.1 0.3 0.6
Amortisation of intangible assets 11 0.4 0.3 0.5
Restructuring costs 6 1.0 1.3 3.3
ROUA Impairment 6 - - 0.1
Transaction costs 6 0.2 - 0.3
Adjusted operating profit 2.9 5.7 9.3
----------------------------------- ------ --------------- ------------ -----------
Reconciliation of EBITDA to adjusted EBITDA:
52 weeks
26 weeks 26 weeks ended
ended ended 31 Dec
1 Jul 23 2 Jul 22 22
Notes (unaudited) (unaudited) (audited)
GBPm GBPm GBPm
-------------------------------- --------- ------------ ------------ ----------
Operating profit as determined
under IFRS 1.4 4.1 5.2
Depreciation and amortisation 11,12,13 0.7 0.8 1.5
ROUA Impairment - - 0.1
EBITDA 2.1 4.9 6.8
-------------------------------- --------- ------------ ------------ ----------
Adjusted operating profit 2.9 5.7 9.3
Depreciation 12 0.2 0.2 0.4
Adjusted EBITDA 3.1 5.9 9.7
-------------------------------- --------- ------------ ------------ ----------
21. Post balance sheet events
On 5 July 2023, the 0.5 pence per share maiden dividend was paid
to shareholders. The dividend recognises the Company's significant
progress over the last two years, during which time it has
generated Adjusted EBITDA of GBP19.8 million on the assets acquired
at the start of 2021 for GBP10.2 million.
INDEPENT AUDITOR'S REVIEW REPORT TO NATIONAL WORLD PLC
On the interim financial information for the six months ended 1
July 2023
Conclusion
We have been engaged by the Company to review the condensed set
of financial statements in the half yearly financial report for the
26 weeks period ended 1 July 2023 which comprises the Condensed
Consolidated Income Statement and the Statement of Comprehensive
income, the Condensed Consolidated Statement of Financial Position,
the Condensed Consolidated Statement of Changes in Equity, the
Condensed Consolidated Cash flow Statement of National World plc
and the related notes 1 to 20.
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 weeks period ended 1
July 2023 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 Engagement 2410 (UK) "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity". A review of interim financial information consists of
making enquiries, primarily or 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
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 ISRE 2410 (UK), however future events or conditions may
cause the Group 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.
Leo Malkin
Statutory Auditor
Crowe U.K. LLP
London
EC4M 7JW
31 July 2023
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END
IR FIFLEDEILVIV
(END) Dow Jones Newswires
July 31, 2023 02:00 ET (06:00 GMT)
National World (LSE:NWOR)
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