Logo The Economist  (43.40% issued capital, 20% of voting rights)

 

 

The key consolidated figures of The Economist Group reported for the year ended March 31st 2016 are as follows:

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For a correct interpretation of the figures it should be noted that the financial year of The Economist Group does not coincide with the calendar year but covers the period April 1 – March 31.

Total revenues rose by 2% and operating profit did the same. These figures were helped by a stronger dollar. At constant exchange rates, Group revenues fell by 2%. There was a further decline in revenues from print advertising: down 18% in constant dollars. This, combined with the corporate belt-tightening after the global-market meltdowns in September 2015, had an impact on the group’s revenues.

Despite these pressures, The Economist continued to invest in key areas: digital, editorial and marketing. The rest of the Group did encouragingly well. The number of full-price sales of The Economist rose by 3.5%. Revenues per copy increased by 6% while the cost of acquiring a new subscriber decreased by 5%. Circulation profits grew 31% year-on-year to record levels. The Economist Intelligence Unit boosted its profit by 21% and CQ Roll Call by 14%.

The group completed the sale of the building owned in the center of London, realizing a net gain of £103.9 million.

During the period the Company bought back shares for £188.8 million, financed in part by the sale of the above building and new term loans which increased net debt.

Results by division

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Revenues by business increased across all divisions helped by a stronger dollar. Within The Economist Businesses, revenues from circulation grew by 8% because of a higher revenue per copy and increase in paid volume. There was also growth in content solutions (10%) and Economist Events (13%). Advertising revenues fell by 8% overall, though digital advertising revenues grew by 8%. Eurofinance hosted another successful annual event.

The Economist Intelligence Unit had a good year with revenues rising by 8%. The core economic and political forecasting business performed well and we worked hard to diversify beyond this core revenue stream by developing industry expertise and consulting skills. Revenues from the consulting businesses grew by 25%. The two existing practices – healthcare and public policy performed well. We acquired Canback in July 2015, a specialist consultancy firm with expertise in consumer industries.

CQ Roll Call revenues grew by 5% despite dips in the advertising market helped by a stronger dollar and new product launches.

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Operating profit for The Economist Businesses was affected by the ongoing decline in high margin print advertising revenues and continuing investment in digital, editorial and marketing. Circulation profits grew however by 31%, to record levels. The Economist Intelligence Unit operating profits benefited from the increase in revenues whilst CQ Roll Call increased its operating profits by 14% due to a busy Congress and careful management of resources.

Significant events in the year 2015/2016 and subsequent events

2016 was a year of challenge and transformation. Like other players in the industry, The Economist Group is facing challenges – the unrelenting decline in print-advertising revenue, changes in how people consume content, and occasional global-market impacts that can sharply affect revenue. Confronted with such challenges, the group has chosen to continue to transform its business through continuing investment in digital, editorial and marketing so that it can remain robust and continue to deliver excellent value for its shareholders.

Within The Economist Businesses, the volume of subscribers has grown by 3.5% including the number of new subscribers by 27% reducing the digital acquisition cost by 10%. The Economist Group launched the Global Business Review, the first bilingual product in its history, for which there were over 500,000 downloads which has opened up new opportunities in China. There have been over 1.25 million downloads of the daily app, Espresso. Economist Films was launched in the year and produced a number of documentaries which has brought our heritage and values into the new medium of video. Intelligent Life was relaunched as 1843, a luxury lifestyle magazine, and The World If was launched. There is now a team promoting our output on a growing range of social platforms and there are over 17 million followers on Twitter, 7.7 million on Facebook and 1.8 million on LinkedIn. The Careers business launched GRE Tutor (a standardized test used in postgraduate admissions) and Executive Education Navigator, the only comprehensive listing of executive education course around the world was launched.

The Economist Intelligence Unit continued to diversify editorially, deepening its city focus with the launch of Market Explorer and with the acquisition of Canback, a consulting firm specializing in consumer predictive analytics. CQ Roll Call launched a new platform – CQ Plus – offering clients an improved legislative tracking experience and Senate Action Reports. CQ.com showed good growth in reader engagement with a 3.5% increase in traffic to 1.6 million site visits.

On May 2, 2016, the Group disposed of its 28% interest in CFO Publishing Holdings Inc for pre-tax proceeds of £3.2 million.

Commercial Register No.64236277 Legal notes | Credits