2015 was a year of great change and innovation for the Group as it continued its mission to build a digital-focused, multi-platform business and to diversify the company’s sources of revenue. For the fifth consecutive year the Group delivered record profits when comparing continuing operations – with operating profit before goodwill amortisation 9% ahead of 2014. This was in spite of difficult trading conditions in our traditional media market, reflected in a 4% decline in our year-on-year revenue.
Operating profit before goodwill amortisation was £3.9m, £0.3m higher than the same figure for 2014. Operating profit was £2.1m, a year-on-year improvement of £0.1m.
BROADENING OUR REVENUE BASE
In a challenging media environment, it remains imperative that the PA Group continues to find new customers and revenue streams, and reduce its reliance on the traditional media sector.
In 2015 we saw further progress towards this goal with our non-media acquisitions – Globelynx, Sticky Content and TNR – delivering 14% of total group revenue and 13% of contribution, almost entirely mitigating the loss of revenue from traditional media.
During the year we acquired the remaining shares in Globelynx, our live broadcasting operation. Under the leadership of new Managing Director, John Holliday, a restructured sales team helped the business double sales and enter new markets including Abu Dhabi, Hong Kong and the US.
We also reached agreement to acquire the remaining 20% stake in Sticky Content, our digital content and content strategy agency, with founder Catherine Toole agreeing to stay on as a non-executive director. Restructuring the sales team to prioritise new business wins has led to Sticky Content signing major new clients like Coca Cola, with more expected in 2016.
TNR, our specialist communications consultancy had its strongest ever profit performance and continued to undertake major video and photography projects for leading UK and international brands. Stand-out campaigns during the year included staging a series of press events to mark the 60th anniversary of Guinness World Records and unleashing a life-sized polar bear in London to mark the launch of Sky Atlantic’s new drama Fortitude. Plans for 2016 include the launch of a survey service and corporate photography offshoot.
Building on the success of our existing investments, in 2015 we began the process of seeking new opportunities to invest in or acquire; complementary businesses that are earnings-enhancing, bring new capabilities into the business and deliver against our objective of revenue diversification. Deploying the proceeds set aside for this purpose from the sale of Meteogroup in 2014, we are confident this process will yield attractive investment opportunities in 2016.
TRANSFORMING OUR NEWS OPERATION
In our core content business, centred on the news Agency, the focus remained on building new products and services for digital platforms. This has involved significant investment in technology and a programme of training and development for our editorial and commercial teams, ensuring our people are equipped with the tools to create and sell high quality digital services. In tandem with these initiatives there have been a number of new appointments to key roles to ensure we have the right skills and leadership to deliver the changes the business requires.
At the beginning of the year we also introduced a new visual identity to better position PA in the digital landscape and allow easier integration of our branding onto digital channels for both internal and external stakeholders. Going forward, the Group’s branding will focus on the initials ‘PA’ rather than ‘Press Association’.
The beginning of the year saw the appointment of a new Editor-in-Chief, Pete Clifton. As part of his remit to evolve the Agency into a more digitally-focussed news and information business, he initiated a wide ranging transformation plan including the establishment of multi-skilling across our news gathering teams and command desk; a unified planning system, new types of story-telling for digital and social platforms; and a renewed focus on video.
There were a number of senior editorial appointments during the year to upgrade our skills in key positions including a Head of Video, Head of Production, Head of Social Media, Entertainment Editor, and the agency’s first data journalist.
A new social media team was established under Darren Waters who joined PA as its first Social Media Editor in December 2014. His strategy for the agency brought clarity and consistency to our approach to newsgathering and publishing updates on these vital channels. This focus has significantly increased our online following across our accounts, with the @PA Twitter account alone doubling its followers to 41,000 in the year. All our journalists received training on social media, and their updates on PA social accounts are widely followed by media clients.
In response to market trends, PA’s video service underwent a complete refresh in 2015 with significant investment in a new end-to-end system. All our footage is now shot in HD, and a cloud-based system allows us to input, process and publish video content more quickly. The agency invested in its first drone and a new broadcasting channel to send live video back to the newsroom for faster turnaround to customers. A new portal also makes it easier for customers to find and download video content.
Upgrades to journalists’ mobile phones have led to a dramatic improvement in the quality of reporter generated pictures and videos captured and shared on our main wires and social media accounts. On an almost daily basis, one of our reporters will capture a video or picture that will appear on newspaper front pages, websites and television.
One highlight of many was the footage of the Tadcaster Bridge collapsing during the floods that plagued the north of England over the winter. Shot by a PA reporter on his smartphone, it was to prove the best footage of the incident, and sold widely to customers across the UK and Internationally.
Snappa, launched in 2014 to target millennial audiences, marked its first full year of operation in August. Based on just the subset of customers who share data with us, the service has had more than 33 million page views and published more than 20,000 stories. The total actual audience is many times higher. Its highly shareable, image-led stories can be found on several of PA’s existing clients’ websites including Yahoo, BT and BreakingNews.ie, and it has opened up new revenue channels such as the outdoor and Transport sectors.
Insight from our customers has been invaluable during this period of transformation. Throughout the year the editorial team, in tandem with commercial colleagues, have carried out a concerted programme of client visits across the UK to get a better understanding of how their newsrooms work and how PA can better support them.
STAYING AT THE FOREFRONT OF THE YEAR'S BIGGEST STORIES
PA remained at the forefront of coverage of many of the year’s most dominant stories, while innovating to build on the breadth, depth and value of content, and the way it is delivered to customers.
Our comprehensive coverage of the general election in May included a number of firsts to keep social media at the heart of our reporting.
Innovations included: a rolling “live” service on the wire of short, rapid updates, designed to meet the requirements of our customers’ live blogs. We also introduced fast, simple and informative graphics; a daily 60-second video round-up; curated lists of social media updates from our reporters and the wider Twittersphere; a Snappa election channel; and a live blog that plugged directly into digital clients including MSN and BT.com.
The election also marked PA’s first collaboration with Facebook which saw us manage the social network’s ‘UK Politics’ page, curating and posting the most shareable content from the PA and around the web.
During the campaign period, we also supplied data to power Google’s ‘Make Up Your Own Mind’ search feature which allowed the public to find information about their local candidates.
The Royal Family remained a source of interest to both UK and international audiences, with PA coverage featuring heavily across major news outlets.
The highly anticipated birth of Princess Charlotte led to another triumph of planning and the skill of our photographers. One iconic image – the only clear shot of the baby’s face as she left hospital with her parents – appeared in multiple newspapers, magazines and websites across the world.
In the year that Queen Elizabeth II became the country’s longest reigning monarch, PA made excellent use of its image archive. Highlights included a stunning gallery of pictures – one for every year of the Queen's reign – which sold particularly widely to online news outlets.
Breaking exclusive stories remains an important goal for the agency, and the efforts of our news teams have been greatly enhanced by information and data acquired under the Freedom of Information (FoI) legislation in the UK.
Investigations carried out during the year revealed, among others, the level of expenses claimed by the Speaker of the House of Commons; the millions of pounds made by hospital trusts in car parking charges; and the number of registered sex offenders reported missing across the UK.
Snappa also gave a new dimension to our coverage of the Paris terror attacks in November, with several news sites pulling in tagged content to populate their own live blogs.
The world of sport also provided PA with some of its biggest stories of the year. In June, our reporter Martyn Ziegler uncovered evidence linking Fifa President Sepp Blatter’s right-hand man Jerome Valcke to the ongoing bribery scandal. Blatter resigned eight hours after Martyn tweeted the incriminating letter.
Planning also began during the year for the agency’s coverage of key sporting events in 2016 including the Ryder Cup, the UEFA European Championships, and the Olympic and Paralympic Games.