Condé Nast Britain Returns to Profit in 2018 Despite Turnover Decline
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BACK IN BLACK: Condé Nast Britain, which manages British Vogue, GQ, Tatler and 10 other brands, swung back to profit in fiscal 2018, despite a 7.8 decline in turnover.
Ahead of filing at Companies House, the official register of U.K. businesses, Condé revealed that profit was about 2.7 million pounds, compared with a loss of 13.6 million pounds in the previous year, when restructuring costs weighed on the bottom line.
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Profit was still lower than in 2016, when Condé Nast Britain reported takings of 4.3 million pounds, roughly the same as in 2015.
Revenue in 2018 fell 7.8 percent to 104.6 million pounds, due chiefly to the cut in Glamour’s print frequency from 12 to two issues a year.
The title relaunched in March 2018 as a beauty-first, mobile-first, Millennial-focused brand and has expanded its live events business to Manchester, England and launched the Glamour Beauty Club, a product sampling business.
During the period, oversight of the Condé Nast College of Fashion moved from the British arm to Condé Nast International Ltd., which is being merged with the publisher’s U.S. parent.
Condé Britain, which operates 13 magazine brands in the U.K., described 2018 as “a strong year,” with positive performance across the business leading into 2019. In 2018, Condé Nast Britain said it sold nine million magazines in 60 countries, had 17 million followers globally and produced 60 events.
Albert Read, managing director of Condé Nast Britain, said: “We are pleased with our 2018 results — combining continued strength in print with an expanding remit to new digital and events platforms.” He added that the company was cautiously optimistic about the future, despite market uncertainty.
During 2018, Condé Britain said it continued to invest in, and grow, its digital offer and events, and cited “strong” digital revenue and traffic across the brands. GQ broadened its events program with the expanded GQ Car Awards and the biggest Men of the Year Awards yet. Wired expanded its events program, as well as its business-to-business consulting business.
The British division said the Condé Nast parent company continues to make significant investments in its long-term digital growth, including the development of multiple platforms that have a global reach. It said strategy contributed to inter-company charges, which were included in the operating expenses.
Top performers in the year included British Vogue, which posted an increase in its Audit Bureau of Circulation figure of 1.1 percent year-over-year under new editor Edward Enninful. Condé Nast Traveller saw an increased ABC figure of 3.7 percent year-over-year under global editor Melinda Stevens, while Tatler’s ABC figure was up 1.2 percent under new editor Richard Dennen.
The British company said it is facing risks and uncertainties, mostly caused by the current political situation in the U.K., with the question marks about Brexit potentially impacting parts of the business.
Condé Nast Britain said it has put contingency plans in place “to assure continuity for our import and export streams. The impact on the retail climate and consumer purchasing power remains uncertain. Through continued focus on creativity and quality, Condé Nast remains well positioned in the premium market.”
Considering exceptional items and contributions to the defined benefit scheme, underlying operating profit for 2018 was 11.4 million pounds. Exceptional items included a combination of the remaining costs of the restructuring from 2017, as well as the surrender fee for premises no longer needed.
Before company cross charges, underlying operating profit increased by 82 percent to 20 million pounds from 11 million pounds in 2017, which had been a tough one for the company.
In January, Condé Nast Britain disclosed its 2017 numbers — and its first loss since 1995. During the period the company had consolidated all operations into Vogue House in London and whittled away about 60 staffers. In 2017, revenue fell 6.6 percent to 113.5 million pounds.
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