Annual Review 2009/10

Consumer magazines have faced a difficult environment in the UK over the last 12 months: advertising revenue and newsstand circulations both fell for the market as a whole. However magazine subscriptions were more resilient. Against this background, Magazines' sales fell only 1.3%.

BBC Magazines put in place a range of cost-control measures in mid-2008, followed by a major restructuring from May 2009. As part of the restructure, it was decided that it was no longer viable to operate Good Homes profitably and we sold the title. These restructuring and cost-control measures contributed to an increase in profit of 13.6%.

Radio Times, Lifestyle, Specialist

Our four biggest titles - Radio Times, Good Food, Gardeners' World and Top Gear - all maintained their market-leading positions. Radio Times increased its share of the premium listings market and Top Gear now sells more than the next two motoring magazines combined. Other specialist titles, including History, Focus and olive, continued to grow circulations against the overall market trend. Our travel magazine Lonely Planet posted encouraging initial ABC circulations and was recognised with four awards, including Consumer Travel Publication of the Year in the Travel Press Awards and BSME New Consumer Editor of the Year.

Overall circulation for the adult portfolio rose slightly year on year (2.40m against 2.37m copies in the previous year) - a testament to our strong brands and our high editorial and production values. (All figures: ABC Jul-Dec 2009.) Subscriptions, which have been a strategic focus for the past five years, grew 9.6% during the year to an all-time high, now 940,000.

The major magazines were operated in close co-operation with their sister websites in Digital Media which enjoyed a strong year (see Digital Media).

Our portfolio of international licensed editions continues to grow with 46 licences in place across 11 titles and 54 territories by year end. Lonely Planet, which was always conceived as a title with significant international potential, now has seven international editions, including India and France. More are in the pipeline.

Children's Magazines

During the year, Magazines invested in the launch of its first partwork for children - Top Gear Turbo Challenge. This product has quickly become the biggest partwork property in the UK by volume and is expected to generate a significant profit in 2010/11. BBC Magazines continues to refresh its pre-school portfolio, and launched Waybuloo and CBeebies Special.

Joint Ventures and Associates

UK joint ventures and associate companies comprise Frontline (magazine distribution) with Haymarket and Bauer, Dovetail (subscription fulfilment) with Dennis Publishing and BBC Haymarket Exhibitions (consumer shows) with Haymarket Exhibitions. Globally we operate magazine publishing joint ventures in India with Times of India (Worldwide Media) and in Australia with ACP Magazines, as well as the Top Gear Live events business with Brand Events. Taken together the joint venture and associate businesses moved into profitability this year as past investments started to pay off. The previous year's figures had also been reduced by an impairment charge in relation to Worldwide Media in India.

Outlook

We are expecting a further increase in profitability for Magazines in 2010/11 as investments in the current year are realised and as the business sees a full-year benefit from the 2009 restructure. Magazines has exceptionally strong brands, delivers consistent value to advertisers and readers, and operates in market sectors which we expect to remain relatively resilient, in spite of longer-term concerns about the health of markets for printed products. This continues to provide a strong foundation for the growth of the business that we anticipate will come from continued increases in subscriptions, from the digital extensions of our brands, and from the further development of our international strategy.