The Economist

The economist

(34.72% of issued capital, 20% of voting rights)



The key consolidated figures of The Economist Group reported for the first nine months of the financial year 2015/2016 (corresponding to the period March 1 – September 30, 2016), based on the most recent data available, are as follows:

 Half 1 
£ million 2016/2017 2015/2016 Change
Net revenues 161,9 158,0 3,9
Operating costs (144,7) (132,8) (11,9)
Operating profit 17,2 25,2 (8,0)
Profit for the period 12,9 19,4 (6,5)
£ million 09/30/2016 09/30/2015 Change
Equity attributable to owners of the parent (153,0) (22,1) (130,9)
Net debt (123,9) (47,7) (76,2)

For a correct interpretation of the data 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.

The Economist Group’s net revenues in the first half 2016 are up 2% (£11.3 million) from the same period last year. The dollar was stronger against the pound which boosted revenues by £12 million, and the results were also affected by the timing of EuroFinance’s flagship conference which in the first half 2016 is not included in the results, as for 2015 in which it was included.

Headline operating profit decreased by 32% (£8.0 million) in the first half. However the results are still distorted by the Group’s switch to international financial reporting standards last year, and particularly by the treatment of foreign-currency hedging, which contributed £2.3 million to profits in the first half of last year but nothing this year. The later timing of the Group’s largest event which produces £3 million of profit also affects the comparison. Adjusting for these overall operating profit was £2.7million lower than it was a year earlier. Profit for the period from continuing operations was £4.6 million lower.

Net debt was £75.3 million higher than at September 2015 largely as a result of borrowings taken out to partly fund the buy-back of 20% of the Company’s shares, which were converted to Treasury shares.

The increase in negative equity attributable to owners the parent is largely due to the buyback. Additionally the deficit has also increased due to higher pension liabilities driven by the sharp decline in bond yields following the June 2016 Brexit referendum. 

Result by division
 Half I 
£ million 2016/2017 2015/2016 Change
The Economist Businesses 109,4 109,7 (0,3)
The Economist Intelligence Unit 28,6 24,5 4,1
CQ Roll Call 23,9 23,8 0,1
Net revenues 161,9 158,0 3,9

The Economist Businesses continued the decline of advertising: across the Group, for both print and digital combined, it was down 13%, with the sharpest drop in the US. The Economist’s circulation revenue continued to grow because of a recent increase in the price of subscriptions. The Economist Intelligence Unit has made more progress with revenues up 16%. Its traditional products – country reports grew slightly, and the Economist Intelligence Unit has developed new strengths in healthcare data, detailed consumer forecasting and specialist reports on a wide range of subjects. 

 Half I 
£ million 2016/2017 2015/2016 Change
The Economist Businesses 3,8 12,1 (8,3)
The Economist Intelligence Unit 8,0 6,7 1,3
CQ Roll Call 5,4 6,4 (1,0)
Operating profit 17,2 25,2 (8,0)

Operating profit for The Economist Businesses was £8.3million lower caused by the ongoing decline in high margin print advertising and the later timing of the Group’s largest event. In addition The Economist Group have continued to invest in important areas such as marketing, as well as editorial resources including digital and social media. Gross profit from the circulation of The Economist was up by 20%. The Economist Intelligence Unit has benefitted from growth in its healthcare consulting business while CQ Roll Call – the business located in Washington, DC, which provides information on Congress – faced testing conditions, which cut its profits by £1.0 million.

Business outlook

Market conditions in the US are still difficult and might remain so. The Group expects to reach the year-end with stronger revenues than achieved in 2016 boosted by the strength of the US dollar. The stronger dollar, however has also significantly increased the Group’s costs. The Group’s advertising activities continue to face significant structural and cyclical headwinds though the Economist circulation business, predominantly subscription-driven, remains robust.



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