Haymarket, the privately-owned magazine group founded by Lord Heseltine in the Fifties, has revealed flat sales for 2007 despite buying new titles, and warned of tough times to come.
News that turnover at the international company, which also hosts live events, exhibitions and websites was up just 1 per cent to £247m in the 12 months to 31 December, coincided with a stark profits warning from Trinity Mirror and underscored the difficult state of the industry.
Haymarket said pre-tax profit increased by five per cent to a record £32m but said prospects for the future were more doubtful.
‘There is no alternative but a note of caution as we look at the current year and 2009. Trading conditions are tightening in many fields. Serious increase in costs and reduced consumer demand urge caution,’the company said in a statement.
However, it said it was caught in a double bind because the seismic shifts in publishing away from print to online meant it was forced to expand.
‘Caution is difficult to reconcile with the challenges presented by the structural changes through which the media industry is passing. Traditional markets are shifting online and survival for many requires agility to offer new technology opportunities as the old ones decline.”
City analysts said Haymarket is also particularly vulnerable to an economic downturn as much of its profit is based on job advertisements.
Lorna Tilbian at Numis Securities said: ‘You are looking at high commodity prices, high consumer debt, high Government debt, high interest rates, high property prices and high taxes – if you put all these together you only come to one conclusion. Things are getting tougher.
‘There’s going to be a lot of pressure on recruitment, and B2B relies on recruitment advertising.”
The company invested £18m last year in new products, which included PistonHeads.com in the motoring market, pressxchange.com in the print market and CaravanSitefinder.co.uk in the caravanning market. Haymarket, which has more than 100 titles worldwide, also announced two new acquisitions – Boston-based Compliance Week and Windpower Monthly.
Compliance Week goes to 25,000 US subscribers and covers financial, legal, risk, audit, and compliance executives at public companies. Windpower Monthly has a circulation of 5,000 and takes articles from writers in nearly 20 countries.