The parent of magazine publisher Hearst UK has revealed pre-tax losses of £13.4m for 2020 due to the challenges of the Covid-19 pandemic.
The National Magazine Company, of which Hearst UK is its subsidiary, has not been in profit since 2017. In 2019, pre-Covid, it had pre-tax losses of £1.9m.
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Despite an 18% drop in revenue to £115.9m, the company managed costs without using the Government’s job retention scheme, increasing its gross margin from 45% to 46%.
This year (after the 2020 results period) it made up to a fifth of its staff redundant, closed Town & Country UK magazine and sold the Net Doctor website.
In 2020 Hearst UK had around 351 editorial employees, down from 366 in 2019. The publisher's biggest magazine titles include Good Housekeeping, Cosmopolitan, Men's Health, Women's Health, Elle, Esquire, and Country Living.
The company did not reveal the breakdown of its revenue but, in a statement accompanying the accounts dated June, said print advertising is still below pre-Covid levels. It has also been hit by the Covid-induced decline to event revenues, despite running successful virtual events.
The statement was signed by James Wildman, who a month later left his role as Hearst UK chief executive after four years.
Digital advertising, subscription, video production and affiliate are all revenue streams the company hopes to grow.
It said: “Advertising revenue was adversely impacted as advertisers cut back or postponed spend. However, overall advertising decline was mitigated by a rebound in digital advertising in the fourth quarter and strong affiliate revenue performance.”
The statement went on: “The group will continue to develop its magazine and online publishing business and diversify into other areas of complementary revenues organically and by acquisition and partnership. Developing revenue opportunities in video production coupled with a deeper knowledge of the customer will ensure growth for the group whilst system and process enhancements will improve future performance and profitability.
“The group has continued to enjoy sustained subscription revenue growth in 2021, and whilst print advertising revenue remains below pre-Covid levels, digital advertising has continued to grow strongly.”
The group is also hoping to benefit by growing its diversification into accreditation and affiliate revenue as its new product testing facility, the Hearst Institute, opened last year and is now fully operational.
Despite earlier fears that the Covid-19 pandemic would eat a "large proportion" of its cash reserves, Hearst UK still had £23.7m in the bank at the end of 2020, a drop of £2.1m.
UK revenue fell from £126.8m to £93m and in Europe it fell from £8.9m to £6.5m. However US and Canada revenues grew by 1,386% from £1m to £14.9m.
Picture: Hearst UK