JPIMEDIA PUBLISHING LIMITED Annual Report and Financial Statements for the 52 Week Period 5 January 2020 to 2 January 2021
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JPIMEDIA PUBLISHING LIMITED Annual Report and Financial Statements for the 52 week period 5 January 2020 to 2 January 2021 Registered number: 11499982 JPIMEDIA PUBLISHING GROUP ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 2 JANUARY 2021 Company Information 2 Strategic Report 3 Directors’ Report 11 Independent Auditors’ Report 14 Consolidated Income Statement 16 Consolidated Statement of Comprehensive Income 17 Consolidated Statement of Financial Position 18 Consolidated Statement of Changes in Equity 19 Consolidated Cash Flow Statement 20 Notes to the Consolidated Financial Statements 21 Company Income Statement 51 Company Statement of Comprehensive Income 52 Company Balance Sheet 53 Company Statement of Changes in Equity 55 Notes to the Company Financial Statements 56 1 JPIMEDIA PUBLISHING GROUP COMPANY INFORMATION FOR THE PERIOD ENDED 2 JANUARY 2021 Chairman David Montgomery Directors D J Montgomery V L Vaghela Registered Office 9th Floor 107 Cheapside London England EC2V 6DN Company Secretary OHS Secretaries Limited Solicitors MacRoberts LLP Capella 60 York Street Glasgow United Kingdom G2 8JX Orrick Herrington & Sutcliffe (UK) LLP 107 Cheapside London United Kingdom EC2V 6DN Bankers Barclays Bank PLC 27 Soho Square Soho London United Kingdom W1D 3QR Independent Auditors Crowe U.K. LLP 55 Ludgate Hill London United Kingdom EC4M 7JW 2 JPIMEDIA PUBLISHING GROUP STRATEGIC REPORT FOR THE PERIOD ENDED 2 JANUARY 2021 The Directors present their Strategic Report, the Directors’ report and the Audited Financial Statements for the Group, comprising JPIMedia Publishing Limited (the “Company”) and its subsidiaries (“the Group”), for the 52 week period ended 2 January 2021 (‘2020’). On 2 January 2021, the Company was acquired by National World plc (“National World”), which is described further below. Adjusted results are presented for a comparable period of 52 weeks for 2020 and 2019 to provide additional clarity and understanding of the Group’s underlying trading. Adjusted results exclude non-recurring items and for 2019 are presented for the 52 weeks ended 4 January 2020 to provide a more meaningful comparison of year on year trends. A reconciliation between statutory and adjusted results is shown in Note 29. Activities and business review The Group is one of the largest regional and local multimedia publishers in the United Kingdom providing information services to communities through a portfolio of 135 publications and websites. The Group’s portfolio includes iconic titles such as The Scotsman, The Yorkshire Post, Belfast News Letter, Sheffield Star, Edinburgh Evening News, Portsmouth News and Lancashire Evening Post. The principal activities of the Group are to meet the wide-ranging news and information needs of numerous local communities across the United Kingdom. The Group operates a portfolio of print and digital publications providing advertisers with a range of market access and readers with trusted local content. On 2 January 2021, the Group was acquired by National World plc from JPIMedia Limited. The Group’s accounts have not been consolidated into the annual financial statements of National World as National World’s accounts for 2020 are prepared for the year ended 31 December 2020 and therefore the acquisition was post their year end. The results of the Group will be included in the consolidated financial statements of National World in future periods. Strategy and future outlook The Group’s strategy to build a growing digital business whilst continuing to enhance its print publications, which remain structurally challenged, was adversely impacted on the onset of the COVID-19 pandemic from March 2020. The focus during 2020 was to centralise the majority of operations to drive efficiencies and, with limited locally managed resources, to manage the core daily newspaper titles and related websites and several core weekly newspaper titles. Although trading conditions were more challenging, progress continued on the delivery of its strategy with: • the continuation of the Digital transformation project focused on digital first content creation and relevant, timely and local content for its consumers; • continued investment in upgrading website platforms to enhance the user experience; and • the roll out of subscriptions across 13 websites offering consumers a seamless choice of web, mobile and app subscription packages; and • investment in its data analysis capabilities across all areas of the business. Going forward National World will drive performance across the Group to deliver its vision: “To create a modern platform for news publishing through the implementation of a new operating model across multiple brands and platforms by acquiring a number of media and digital technology assets, and leveraging its portfolio to launch new media brands across the UK.” The key pillars of transformation to deliver the strategy vision are to “localise, energise, digitise and monetise” relevant and unique content: • Localise – Our publishing assets provide compelling content for local communities; both consumers and businesses. A greater sense of community awareness has also been generated during the COVID-19 pandemic as more consumers have lived their lives in a smaller locale. With this new spirit of localism, we will ensure our journalists and commercial teams are more connected with the local communities they serve. • Energise – Energise our products and services to enhance user experience and engagement and provide a strong platform to leverage our unique quality content to launch new products and services across multiple platforms. While our print news-brands will be managed creatively and profitably, our strategic focus is on growing local, regional and national online audiences who are deeply engaged with our content. • Digitise – Enhance the digital infrastructure to improve responsiveness, engagement, data analytics, AI content generation and user insights. • Monetise – Create enhanced first party data and use the latest available digital technology to more effectively define audiences to drive multiple digital revenue streams: digital display advertising - targeting growth in higher yielding video content and local digital advertising, digital subscription - targeting both consumers and businesses and e-commerce - focusing on specific categories of content. Further details on the National World strategy are provided in the Annual Report and Accounts of National World for the year ended 31 December 2020. To monitor progress the Board will assess the appropriate KPIs which will be actively monitored and reported and will cover: • Digital audience - including unique users, page views and registrations; • Digital revenue - Build through the key categories of display, subscriptions, video and e-commerce; • Revenue trends - Management are intent on developing a model to improve revenue trends with KPIs that monitor a transition from dependency on print sales to an accelerating digital performance; and • Cash generation and financial flexibility - To provide headroom for investment and the return of capital to National World through either repayment of inter-company loans or dividends. Management are keen ensure financial flexibility will be a key KPI. During the first half of 2021 the Board is focused on stabilising and establishing the appropriate organisation structure of the Group and will present detailed KPIs for monitoring our performance in the 2021 results. 3 JPIMEDIA PUBLISHING GROUP STRATEGIC REPORT FOR THE PERIOD ENDED 2 JANUARY 2021 The Group employs experienced and professional journalists and adheres to the highest standards in producing trusted content. Trusted local content is key to our consumers in a world with a proliferation of information sources. The Group is actively marketing its trusted, local products to its consumers and differentiating itself from other information sources. A full list of titles, which provide essential reading to communities across the United Kingdom is available online via the JPIMedia website: https://www.jpimedia.co.uk/newsbrands/ Employees The commitment, creativity and drive of our employees are core to the transformation and success of the business and our people have performed exceptionally well during a year of intense challenge due to the COVID-19 pandemic. The pressure of working under lockdown restrictions have provided a challenging background, however, our journalists have adapted and worked extremely hard to continue to deliver outstanding journalism to their local communities. Our commercial and support staff have also adapted, with remarkable resilience delivering customer needs and campaigns to those who could continue to market their business. The health and wellbeing of our employees has been a huge focus for us, in particular with the onset of the COVID-19 pandemic. We have developed a platform of supported material including: virtual classroom learning for our management teams to help with supporting their teams with remote working and one to one coaching to develop interventions and coping strategies for those employees whose mental health has been affected. We have introduced pulse surveys to analyse our employees’ thoughts and feelings and as a follow up to the survey we developed communication channels to encourage our employees to engage with our Mental Health First Aiders and HR professionals. Principal risks and uncertainties The principal risks have been revised, following the acquisition of JPIMedia Publishing Limited by National World