NewsTeam Group is continuing its drive to build the UK’s first nationwide home news delivery service despite reporting losses and “material uncertainty” over its finances.
The company reported more than doubling its workforce and a 42% revenue increase to nearly £42m, fuelled by the acquisition of rounds from newsagents.
Despite the growth, the company returned to making a loss, with a £705,869 shortfall.
The annual report, which covers the year ending 1 January 2021, was signed off and published last month.
With liabilities exceeding its assets, the company is dependent on continued financial support from majority shareholder and PaperRound founder Michael Kinton.
In its results, NewsTeam Group’s directors said this “may cast significant doubt” over the company’s ability to continue trading as a going concern, but added they were confident in Kinton’s continued backing.
NewsTeam Group’s strategy of achieving full coverage of UK postcodes is a core part of its forecasted “significant profitability in 2023” because it helps the company’s aims to pick up national delivery contracts direct with news and magazine publishers.
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The company also revealed it “started to diversify our home delivery options to include other products” beyond newspapers and magazines.
Director Jonathan Kennet said: “While this strategy resulted in a loss in the period, the company is now in a stronger position to service more national contracts to improve its profitability.”
The company currently covers at least 74% of all UK postcodes and Better Retailing understands NewsTeam Group has made further gains towards its national coverage beyond the period covered by the results, including acquiring HND rounds from rivals McColl’s during the latter’s latest bout of store closures, which concluded at the beginning of 2023.
If successful, NewsTeam Group’s strategy means all independent home newspaper delivery agents will soon face competition from one of the UK’s largest newspaper delivery companies.
The delivery giant’s expansion success was in part attributed to publishers driving smaller shops out the market through margin cuts.
Describing its growth strategy, NewsTeam Group wrote: “In recent years, there has been a very significant reduction in the number of newsagents as volumes have declined and margins have been squeezed. This represents an opportunity for NTG to acquire their home delivery rounds.”
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