According to Haymarket: Trading during the year was ahead of budget as Haymarket continued to focus on content-distribution in the motoring, medical, data security and marketing-communications segments, particularly in the US and increasingly on digital platforms.
The solid financial performance coincided with a major property disposal programme, culminating with the sale in November 2015 of Haymarket’s former headquarters complex at Teddington, south west of London. Proceeds from the latest property sale enabled the Group to reduce net debt by almost 80% to less than £20m, compared with £94m at the end of the financial year.
Lord Heseltine, Chairman of Haymarket, said: “Our Group is well-placed to seize expansion opportunities in the media industry following an encouraging operational performance in the last financial year. We have significantly strengthened our balance sheet since the year-end, with the sale of our Teddington site, enabling Haymarket to continue its digital transformation in our core markets.”
The improvement in operating profit was driven primarily by growing demand for online content, notably in the motoring segment where Haymarket’s popular ‘Pistonheads’ platform continued to expand, as well as for specialist contract-publishing and medical and pharmaceutical business-information, notably in the US.
Kevin Costello, Group Chief Executive, added: “We have focused on segments where Haymarket has established expertise, whilst rationalising non-core parts of the portfolio and maintaining financial discipline across the business. We can continue to execute on the Group Growth Plan – identifying geographic and market segments that promise healthy returns – from a position of underlying strength.”
Since the Group Growth Plan (GGP) was launched in 2012, group borrowings have reduced seven-fold from £144m and digital revenues have increased to 33% of the group total (current forecast is 37%). Print revenue now represents 42% of total revenue, down from 61% in 2012 at the start of the GGP, and is forecast to decrease further in the current financial year.
Over the past two years, Haymarket has completed 10 non-core disposals – reducing its presence in countries such as Germany and Australia – while expanding in North America through bolt-on acquisitions. In the latest such deal, Haymarket acquired Group DCA, based in New Jersey, to expand its presence in the US market for online medical and pharmaceutical information.
Contributions from DCA and other operations partially offset lower revenues from the Group’s reduced presence in Australia and Germany.
At the pre-tax level, Haymarket reported a loss of £2.8m, compared with a prior-year profit of £11.1m, in which the figures were flattered by £16.4m of property disposals.
Kevin Costello, Chief Executive said: “Although we have not been immune to the volatile advertising climate we have been able to weather the storm through investment and focus in our top performing segments. We also continued to shift our portfolio away from print in favour of digital and our festivals, conferences and exhibitions businesses.”
(The adjusted EBITDA was 16.3 (2014: 17.6))
