Archant’s chairman has told shareholders he remains optimistic about the regional publisher’s future despite a “very disappointing” year financially.
Simon Bax says advertising revenues declined at an accelerating rate during 2017, blaming a shift of advertising to digital platforms like Google and Facebook, as well as what he called the long-term decline in print readership.
In his report to shareholders ahead of the company’s annual general meeting, set to be held in Norwich later this month, Simon revealed there had been a reduction of 15.5pc in newspaper advertising and 12.4pc in magazines, adding operating costs had been reduced by £9.2m over the year.
However, he said trading in 2018 had started “more promisingly” than 2017.
In the report, Simon wrote: “I am looking forward to the time when I am able to communicate that the company has performed better than expected. Sadly 2017 is not that year.
“It was very disappointing financially and advertising revenues declined at an accelerating rate for all of the reasons I have outlined before, namely the shift of advertising to digital platforms, in particular Google and Facebook, and the long-term decline in readership of printed newspapers, coupled with a challenging property market.
“Despite the financial challenges I remain optimistic that we have the team and the strategy to have a positive future. Against a backdrop of declining revenues and the necessity to cut costs there was much to celebrate: significant non-classified digital revenue growth in key account revenue, winning many industry awards, [Archant content agency] Dialogue winning a significant new account with Bentley Motors, a major cash grant from Google’s digital news initiative fund to digitise and voice-enable out archive and, most importantly, the signing of a strategic partnership with Hearst Corporation for the launch of our own ‘Local Impact’ set of digital solutions.”
Simon went on to describe Local Impact as a set of predominantly digital products which will enable sales teams to sell a range of marketing tools, adding he did not believe any of Archant’s competitors had an “equivalent product in the UK”.
He further reported on the launch of online community platform Enjoy Cromer More, with the model set to be introduced at other Archant titles in East Anglia, Hertfordshire and the South-West of England.
Simon added: “Trading in 2018 has started more promisingly than 2017, albeit on a lower revenue base, and we are confident that we have the team and the strategy to deliver an improved financial performance this year.
“However, not surprisingly, the board does not believe that there is enough certainty around future trading to be able to announce a dividend at this time and so none is proposed.
“I realise that this news is disappointing but we are attempting to rebuild the business, to strengthen the balance sheet, maintain our cash resources and through Local Impact, develop a business that will significantly add to the future value of Archant. This is out focus and we are optimistic that we have established the foundations to enable this to take place.”
Archant’s AGM will be held at The Assembly House, Norwich, at midday on 24 April.
The company has declined to comment further on Simon’s report.