Kent Publisher the KM Group, which this week announced plans to buy seven newspapers from Northcliffe Media, is back in profit for the first time since 2006.
The company had been running at a loss since the 2006 financial year when it had an operating profit of £1.5m. In 2008 the company reported losses of £8.7m and in 2009 – the most recent figures available – it was down £1m. Accounts also reveal that between 2006 and 2009 the company’s revenues were halved, falling from £42.6m to £21.1m.
But ahead of its bid to buy Northcliffe’s Kent Regional News and Media (KRNM) stable Press Gazette has learned that it is now back in profit and over the worst of the recession.
Managing director Graham Mead told Press Gazette: ‘All businesses in the sector have been through the most atrocious recession, and a structural change within the media industry. What we can say is that we will see a small operating profit in 2010.”
Mead points to restructuring exercises that the company, publisher of the Kent Messenger and the Medway Messenger, undertook in 2008 and 2009, which saw a big reduction in headcount and the outsourcing of its printing operations.
Revenues were also hit when a contract to print Associated Press title Metro came to an end in March 2009. In the previous year KM Group had cut 61 jobs after suffering ‘unsustainable annual trading losses’when revenue fell £9m as a result of the credit crunch.
In the same year the company closed six offices including Dover, Faversham, Sittingbourne and Tunbridge Wells. In 2009 it announced it was making a further 159 redundancies – nearly 30 per cent of its workforce – to drive down costs.
KM Group’s total weekly readership is down from around 927,000 in 2008 to 563,142, but the listenership for its seven kmfm radio stations is up from 154,000 to 184,000, and the number of unique visitors to its websites has risen from just around 200,000 unique users to almost 300,000.
The KM Group made a formal submission to the Office of Fair Trading on Monday to acquire KRNM. If it gets approval from the competition watchdog it will acquire the Dover Express, East Kent Gazette, Folkestone Herald, Isle of Thanet Gazette, Medway News, the Thanet Times and the Herne Bay and Whitstable Times.
Northcliffe bought the KRNM group from Trinity Mirror in July 2007 in a £64.2m deal that saw it acquire 25 of Trinity’s local papers in Kent, East Surrey and Sussex, including paid-for weeklies the Croydon Advertiser and the Surrey Mirror.
KM Group’s proposed acquisition is now subject to a 40-day investigative process by the OFT.