Lord Heseltine’s Haymarket Publishing, owner of magazines including Stuff, Autocar and FourFourTwo, reported a small rise in operating profits to £5m last year after selling off its headquarters to slash its debt by 80%.
The publisher reported an 8.7% rise in operating profit to £5.03m as revenues fell slightly from £187m to £184.3m in the year to the end of June 2015.
On a pre-tax basis the company reported a loss of £2.8m.
The publisher said that digital revenues accounted for 33% of the total £184.3m last year, and they are expected to hit 37% in the current financial year to the end of June 2016.
Print revenues accounted for 42% of total revenues, down from 61% in 2012.
“Although we have not been immune to the volatile advertising climate, we have been able to weather the storm through investment and focus in our top performing segments,” said Haymarket Publishing group chief executive Kevin Costello. “We also continued to shift our portfolio away from print in favour of digital and our festivals, conferences and exhibitions businesses.”
The company, which was co-founded by Heseltine in 1957, said the small increase in operating profit was due to growing demand for online content, especially the motoring brand Pistonheads, as well as specialist contract publishing and its medical and pharmaceutical business information service in the US.
It has undertaken a radical restructuring programme in the last three years in order to strengthen its financial position.
The programme, including a £116m property disposal plan that saw the business move out of Hammersmith and sell off its former HQ in Teddington in November, has brought its net debt under control.
The publisher reported net debt of £18m in the year to the end of June 2015, just over one times company earnings before interest, tax, depreciation and amortisation of £16.3m.
This is considered to be a very healthy ratio of net debt-to-ebitda, a key financial measure that affects covenants with banks.
This is well down on the unhealthy five times ratio of the previous year to the end of June 2014, when earnings were £17.6m and net debt was £88.4m.
“We have significantly strengthened our balance sheet since the year-end, with the sale of our Teddington site, enabling Haymarket to continue its digital transformation in our core markets,” said Heseltine, who took full control of the business in 2013.
