Haymarket's profits jump 150% to £8.6m

Haymarket Media Group says it is in acquisition mode after increasing annual profits and wiping out debt to end the year with £10m in net cash.

 

Profits before exceptional items – known as earnings before interest, tax, depreciation, amortisation and exceptional items, or EBITDAE – rose 150% to £8.6m in the year to June 2019 compared with £3.5m a year earlier.

 

Revenue at the owner of Autocar, Campaign, Finance Asia, MyCME, PRWeek and What Car? climbed 9% on a like-for-like basis to £161.6m – primarily because of growth in the US medical business.

 

Annual turnover dropped on a statutory basis from £163.5m a year earlier, following Haymarket’s sale of its consumer titles in May 2018.

 

Kevin Costello, chief executive of Haymarket, said: "These results show a business in sound financial shape.

 

"In a year of economic and political uncertainty, with the media industry in the middle of transformation, we are fulfilling our strategic goal of building a balanced portfolio of diversified revenues across our core markets: business media, content solutions and automotive technology.

 

"Over 70% of our revenues now come from digital, data and live activity, and for the first time more than half of our revenues are generated from outside the UK." 

 

Haymarket’s international operations include the US, south-east Asia, India and Germany.

 

Costello, who marked 10 years as chief executive at the start of January, added: "A major focus over the past few years has been bolstering our balance sheet.

 

"Today, we are debt-free, with cash on the balance sheet. Ten years ago, our debts stood at more than £150m. This means we have the resources to grow organically and through acquisitions." 

 

Haymarket moved from £400,000 in net debt in June 2018 to £10.3m in net cash in June 2019 and the company plans to use the money to expand, rather than take cash out of the business.

 

Costello said the most likely focus of mergers and acquisitions would be the group’s three key divisions, motoring, medical and marketing, which make up 64% of turnover.

 

Having spent more than £20m, Haymarket continues to invest in its automotive platform, What Car? New Car, and it has been making acquisitions, including NACE, a US medical education business, last year.

 

"We’re actively in market trying to find opportunities" for further acquisitions, Costello said, adding: "We may see more M&A [across the whole media industry] in 2020 than in the last five years. We’re well-placed to exploit that as a consolidator." 

 

'More opportunity today than there ever has been'

 

Lord Heseltine, chairman of Haymarket, said: "These outstanding results show a business that is financially sound, clearly focused and enjoying significant, sustainable growth."

 

Heseltine, who co-founded the company in 1957, went on: "There is more opportunity today than there ever has been and Haymarket has never been better-placed to take advantage of it. 

 

"In every market and geography in which we operate, we are going for it. I have complete confidence in the team's ability to ensure that the company keeps growing and developing in the right way."  

 

Growth

 

Costello expects further growth in profits in the current financial year to June 2020, which will see the benefit of a full year of revenue from NACE.

 

He said the expansion of Haymarket Automotive and its ecommerce platform was "at a pivotal and important point" with the recent launch of a first TV ad campaign for What Car?.

 

"It’s testament to our confidence in the platform and the product that we’ve built, as we go into the key buying season for new cars in the UK," Costello said.

 

He highlighted other areas of growth, including Haymarket Business Media’s paid content and known audience strategy, the development of large-scale events such as Campaign’s Media 360 in Brighton and the evolution of data-driven products such as Development Control Services in Gloucester.

 

Print has dropped to 27% of group turnover, including just 15% of HBM and 12% of Haymarket’s US business.