Hearst UK halves losses to £2.7m but revenues slide 7% despite circulation lift

Hearst UK has halved its annual loss to £2.7m and increased circulation but revenues still fell 7% to £262.6m last year because of pressure on distribution arm Comag.

Hearst: will move from its two Soho offices to a new building in Leicester Square next year
Hearst: will move from its two Soho offices to a new building in Leicester Square next year

The owner of Good Housekeeping, Elle, Harpers Bazaar and Esquire said the average circulation of its titles rose 0.8% to 2.92 million, which it described as "significantly better" than the wider market which fell 7.5%, according to Hearst.

The UK arm of the US family-owned media company has experimented with price cuts and increased distribution of free copies, which it has dubbed dynamic distribution.

Circulation of monthly titles such as Cosmopolitan, which reduced its price to £1, rose 3% last year.

Hearst UK said it is "pleased with the performance" and expects to improve profitability because of its "rigorous cost focus".

James Wildman, the former chief revenue officer of Trinity Mirror, took over as chief executive of Hearst UK in April, after Anna Jones left to start her own business.

Hearst UK, which still uses its old name, The National Magazine Company, to file accounts, blamed its decline in revenues last year principally on Comag’s woes.

Earlier this year, the publisher pulled out of Comag, in which it had a majority stake with Condé Nast, and moved to another distributor, Frontline. Comag is expected to shut.

Hearst UK's accounts warn "fluctuations in advertising revenue" are one of the main risks facing the company.

The pension deficit jumped to £34m at the end of 2016 from £10.8m a year earlier, although Hearst UK is said to believe the shortfall is manageable.

In a vote of confidence in the business, the US parent company has given the green light for the UK operation to a move to a new office, LSQ, in Leicester Square, next year.

The UK magazine industry is facing consolidation with another US publisher, Time Inc, planning to sell its British titles.

An industry observer claimed Hearst UK is unlikely to bid for Time Inc UK because of competition concerns.

Hearst UK declined to comment.

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