News Corp's UK revenues fall 19% after taking currency hit from Brexit

Rupert Murdoch's UK newspapers saw revenues tumble 19% in the 12 months after the Brexit vote.

News Corp counts cost of Brexit as UK revenues fall 19%

US-listed News Corp said the collapse in sterling was the main reason that revenues fell $244m (£189m) to $1.04bn at its UK newspaper arm in the year to June 2017 compared to $1.28bn a year earlier.

Revenues at the owner of The Sun and The Times were "adversely affected" by a $177m currency hit compared to a year earlier.

There was a further $21m drop because the financial year was one week shorter than in 2015-16 when there was a 53-week accounting period.

Leaving aside those exceptional items, UK newspaper revenues fell $46m or 3.6% in the year to June 2017, according to a calcuation by Campaign.

The annual report showed advertising came under pressure but circulation and subscription revenues held steady.

The figures do not include Wireless Group, the owner of talkSPORT which News Corp acquired last year.

UK ad revenues fell by $114m over the 2016-17 period.

News Corp said $51m of the drop came from "weakness in print advertising", $52m from sterling’s decline and $13m was because of the shorter financial year.

UK circulation and subscription revenues fell $111m but they would have been almost flat without the currency shift, which was responsible for a $96m drop, and the shorter financial year, which accounted for another $13m.

Falling circulation volumes, primarily at The Sun, led to a $33m drop but that was offset by a $32m increase from cover price rises for The Sun and The Times.

Brand partnerships also performed well, generating an extra $14m.

The Sun and The Sunday Times both backed Brexit while The Times supported staying in the European Union ahead of the vote in June 2016.

News Corp listed Britain’s exit from the European Union as a "risk factor" in the annual report, warning there has been "a period of economic and market uncertainty as a result of Brexit".

The report continued: "While the impact of Brexit is difficult to predict, it could significantly affect the fiscal, monetary and regulatory landscape, lead other member countries to consider leaving the European Union, result in additional volatility and disruption in the financial and other markets and have an adverse impact on the company’s businesses in the UK and elsewhere."

News Corp said last week it has taken a $360 writedown on the value of its UK newspaper assets because of the declining print market.

Robert Thomson, the chief executive, also told investors the company plans to make "fairly aggressive" cuts to the UK operation, mainly in areas outside editorial such as "back-office" and "centralised" costs.

"We have to invest in our content in order to drive our products going forward," he said.

Thomson added News UK was still performing well.

The Sun, which dropped its online paywall in 2015, "is fast closing the gap with the [Daily Mail] in the UK" and The Times and The Sunday Times have nearly 500,000 paying subscribers across print and digital, he said.

News Corp, which also owns The Wall Street Journal, New York Post, The Australian, HarperCollins and Foxtel, made a global pre-tax loss of $615m because of asset writedowns. Revenues dropped 2% to $8.14bn.

Profits before exceptional items, known as Ebtida, rose 29% to $885m globally. News Corp did not disclose profits or total ad and circulation revenues for the UK.

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