Haymarket Media Group reported annual profit of over £ 8million in the last fiscal year as strong performance in its US medical business offsets the worst of the coronavirus slowdown.
Haymarket, which owns more than 70 brands including What Car ?, Autocar, Campaign, GP Online, PR Week, MyCME and Finance Asia, said earnings before interest, taxes, depreciation, amortization and exceptional items (Ebitdae) are amounted to £ 8.3million in the until June 2020, up from £ 9.1million for the previous 12 months.
Annual accounts filed with Companies House show revenue fell 12% to £ 142.9million from £ 161.6million – a drop which the company says was caused solely by the crisis in Covid-19.
Sales fell 29% between March and June in the last four months of the year. The UK has been among the hardest hit, with income falling 40% during that time.
Haymarket chief executive Kevin Costello said the company had shown “resilience” by adopting a three-pronged strategy early in the crisis: contain costs, preserve cash and save jobs.
The cost savings included temporary pay cuts, a hiring freeze, and sharp cuts in spending, travel and freelance expenses as employees worked from home and some were on leave.
Haymarket remained profitable even after one-off items, which included a restructuring of staff and a reduction in office space as the company terminated some real estate leases.
However, the company’s position was bolstered by a windfall from the sale of Secure Computing in August 2019.
Haymarket had a net cash of £ 24.8million at the end of June 2020, up from £ 10.3million a year earlier, as the company built up reserves to deal with the crisis – without get into debt or refinance.
Costello said, “These results show a company that has responded quickly and appropriately to a global crisis and remains in good financial health.
“In a year of considerable uncertainty, driven by the global pandemic and the UK’s exit from the European Union, and with the transforming media industry, we are achieving our strategic goal of building a balanced portfolio of diversified income in our main markets: media activities, content solutions and automotive technology.
“Over 75% of our revenue now comes from digital, data and live activities, and for the first time, the United States generates more revenue than any other jurisdiction. “
Medical – one of Haymarket’s top three specialties, along with marketing and automotive – generated nearly 95% of the company’s revenue in the United States in the last fiscal year.
Being a private company, with no exposure to stock market volatility, and a fiscal year that ended in June also helped Haymarket navigate “the eye of the storm” at the start of the pandemic, according to Costello.
“In recent years, a major objective has been to strengthen our balance sheet. Today, we are debt free, with liquidity on the balance sheet, ”he added.
“Ten years ago our debts were over £ 150million. This means we have the resources to grow organically and through acquisitions. “
Lord Heseltine, Chairman of Haymarket, said: “These results show that a financially healthy company has responded proportionately in response to the global pandemic. It remains clearly targeted and is positioned for sustainable growth.
“Despite the difficult business environment, there are still growth opportunities for the company and Haymarket is well positioned to take advantage of them. In every market and geography in which we operate, we have responded to the pandemic and are now focused on growth.
“I have every confidence in the team’s ability to ensure that the company relaunches its growth strategy and develops in the right direction.
“We are a creative company”
Costello believes the office and its culture will play a vital role in the future when restrictions on coronaviruses ease, even though he expects more flexible work – a trend he says has been underway since. five years.
“We are a creative company,” said Costello, explaining the continued importance of office work. “Creativity comes through human interaction and spontaneity, so the office will continue to play an important role in the growth of our company and our employees. “
However, the company will need less space and has already made the decision to reduce its office footprint at a range of locations including Twickenham and Feltham in the UK, Chennai and Delhi in India and Hong Kong.
“In each geographic area, we have reassessed our real estate and office portfolio and, without exception, we have downsized,” said Costello.
He praised staff for dealing with the disruption and uncertainty at the onset of the crisis and said the move to virtual events helped offset some of the decline in face-to-face events.
“The response from the company has been phenomenal. The esprit de corps and the basic DNA of the company were brought to light, ”he said.
“Although we unfortunately still had to undergo restructuring internationally, it was nowhere near as bad as it might have been or as we initially feared.”
Haymarket had forecast significant growth for the 2019-2020 fiscal year in February 2020, before Covid-19 went global, and Costello was optimistic the company could soon “bounce back to be on this trajectory again” once vaccines are released. entered into force.
He added that acquisitions are on the agenda as the company has accumulated liquidity. “We want to put the money to work,” he said.