Earnings: PA Scores £8 Million Loss After Devaluing Sport
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The economic slump is bad for newspapers but spare a thought for the people that supply the news: PA Group, owner of the UK’s biggest news agency Press Association, on Thursday reported a pre-tax loss of £8 million for 2008, due to a £8.8 million impairment charge write-down on the company’s PA Sport division. That loss cancels out improved operating profits, 11 percent higher for the year at £7.2 million, and takes the shine off a 7.1 percent rise in total revenues to £102.2 million. There will be no dividend for 2008. PA Group had considered “various offers” for the PA Sport, but in June last year announced it had taken the division off the market. As we revealed in March, the company did manage to sell off its US sports data business SportsTicker to Stats LLC, which is co-owned by AP and News Corp.
SEE ALSO: Press Association Moves More Reporters To Homeworking To Cut Costs
As for the rest of the business, it’s hard to say: the group says the PA agency “has positioned itself as the news agency for digital Britain”, referring to the launch of a video newswire and the company’s on-going talks to form part of a consortium replace ITV’s local news coverage after 2012. But no revenue or profit figures are given—and the fact that it has shut down one regional news office and it considering shutting more would suggest those figures do make for easy reading. For PA Group chairman and former Johnston Press CEO Tim Bowdler, 2008 saw “encouraging progress” as PA continues its shift to digital publishing and the figures represent a “resilient” performance. “Although 2009 will be another difficult year, we are trading ahead of the same period last year,” he says.
Annual Report. (pdf)
PA’s weather business MeteoGroup, bought in 2005, is its strongest revenue contributor and made 27 percent higher revenues in 2008 at £18.3. The company upped its stake in that business last year by 5.1 percent to 89.8 percent. The Canadian news agency CNW Group, which PA has a 50 percent stake in, also had a “strong trading year”. PA Group is in the process of finding a new CEO to replace Paul Potts, who retires in January 2010. PA Group is privately-owned by 27 of the UK’s news publishers including Associated Newspapers and News Corp.
Commenting on the results, Bowdler said: “Encouraging progress was made across the group in 2008…The repositioning of our sports business following the disposal of SportsTicker and the writedowns referred to above have resulted in a more secure base from which to face the future.” On PA’s repositioning as a digital news agency, he said: “The continued investment in video gathering and production and growth of multimedia services has led to an increase in new digital customers. Our focus is now firmly on achieving stronger revenue growth in these areas.”
And given given the turmoil, revenue loss and redundancies at PA’s newspaper clients, the agency says it can help through outsourcing. Bowdler writes: “PA’s traditional newspaper customers are
currently facing a very challenging marketplace. We are listening to their needs during this time and focusing on ways of helping them, particularly through the provision of outsourcing services, in part benefiting from our growing operations in India.” So could we soon see regional newspapers produced fin Mumbai? It’s not that far-fetched: last year the Johnston Press-owned Yorkshire Post Newspapers held talks with three companies, including PA, to outsource its entire newspaper production operation. The Daily Telegraph already produces some of its weekly supplements through an Australian company.
@psmith
May 21, 2009 5:30 AM ET
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