Menzies Distribution is to ‘accelerate’ its diversification into other markets than newspapers and magazines, but has vowed that the newstrade will remain its priority.

Newly released annual results for the year ending 31 December 2022 reveal a £28.1m fall in revenue to £915.5m. Operating profits dropped even more sharply to £3.7m, £8.9m lower than the year before.

Revenue from newspapers and magazines fell by 6.6% but the wholesaler claimed a greater share being made up of one-shot magazines and stickers was partly offsetting the decline through a higher margin mix.

Diversification was the main theme of the report, with plans to ramp up efforts to find new opportunities outside of the newstrade, especially in ‘final mile out-of-home delivery’. One example was parcel firm InPost acquiring a share of Menzies earlier this year. Menzies claimed: “‘This move may also benefit the Group’s important independent retailer customer base through the launch of a new over-the-counter parcel collection service resulting in increased footfall and a new source of income for those retailers.”

Menzies added the diversification would be used to protect the sustainability of delivering newspapers and magazines, and also fund ‘ongoing investment in new and innovative newstrade capabilities.”

Deals with publishers and distributors in 2023, revealed in the results, mean 93% of its newstrade revenue for 2023 and 2024 is ‘secured’, while new deals with Daily Mail Group, Seymour and Frontline guarantee Menzies’ revenues from distributing these firms’ titles through to 2028, 2030 and 2030 respectively.

The firm said newspaper and magazine packing accuracy for the year remained unchanged at 99.9% and 99.8% respectively, while deliveries to stores were on time in 92.7% of drops, up from 91.9% in 2021.

Despite industry-wide concerns around independent stores ceasing to offer newstrade products, Menzies described the closure of 132 McColl’s stores described as the ‘largest customer change event in the newstrade business in 2022.’ The administration of McColl’s cost Menzies 1.1m in debt written off.

While Menzies’ total staff increased from 2,703 to 2,817, head office staff numbers fell while the number of field staff, predominantly drivers, increased.