This article covers bricks and mortar newsagents (excluding pure online retailers) business valuations. This topic was last covered in BNV 115 of April 2011. The business operating conditions and financial performance of these businesses have worsened substantially since this time.
The typical newsagency business has products including, magazines, newspapers, cards/gifts/party items, stationery, books as well as agency services for lottery, dry cleaning and postal/parcel deliveries.
The main franchise/marketing groups in the industry, together with an estimate of their percentage of total industry revenue is as follows:
• Newspaper approximate 13%
• Nextra Group approximately 8%
• NewsXpress approximately 6%
The current revenue for the industry is around $3 billion per year having experienced a substantial downturn of around 6% per annum over the past five years. The main reasons for the decline in industry revenue include:
• Consumer take-up of online content/reduced demand for printed publications.
• Price advantage of online retailers and increasing demand by consumers who are now more willing to shop online.
• Supermarkets expanding range to cover some traditional newsagency product lines.
(For access to this article in full please subscribe to the Business Values Newsletter)