The Telegraph says:
Our results for the year to 31 December 2018 demonstrate strong strategic progress in the face of structural declines across the entire industry in print advertising and print circulation revenues. Whilst revenues and profits have been impacted by the continued industry pressures in line with expectations, we have continued our £10M investment plan in journalism and subscription capabilities. We are approaching the half-way point of our three-phase strategic plan ahead of schedule, particularly with regard to subscriber numbers where we have already reached 400,000 subscribers on our way to our 1m target by 2023.
In 2018 we established a subscription first approach; building on the success of our registration strategy. In September 2018, we set out our vision of 10.1.23; the ambition of reaching 10m registrants and 1m subscribers by 2023. We anticipated that this would take some time to achieve, given the challenges faced by our industry.
Quality journalism is at the heart of everything we do. We have also made the important decision to focus on the quality of our earnings stream and to reduce our exposure to business areas which were not likely to be profitable for us in the long term.
Our intention is to measure our progress in three phases. During phase 1 we have been investing for the long-term future of the business to create new avenues for growth. Phase 2 is about stabilising our revenues with a growing proportion of reader revenue, with early rewards being earned from strategic investments to offset the industry-wide decline. Phase 3 will see the Group emerge into a growth era in profits, with a business fit for the future of journalism.
Our financial results for FY2018
We stand between the end of phase 1 and the start of phase 2 in our plans. Revenues have declined marginally year on year as expected, from £285.7m in 2017 to £278.1m in 2018, although the 2.6% decline was lower than the fall of 5.8% that we saw in 2017. The drop in revenue results from the structural decline across the industry in print advertising and circulation and is partially offset by significant growth in subscriber volumes and revenues.
Within our revenue performance, there were encouraging signs of progress. Total reader revenue saw 2% growth year-on-year. Driven by subscribers, both print and digital subscription revenues continue to grow, more than offsetting casual paper sales decline. Our total subscription revenue increased by 10%, driven by a 27% improvement in digital subscription revenue and supporting our strategy.
We also saw a turnaround in the performance of our print revenues, with a 4% improvement in contribution year-on-year. As a result of this growth, 54% of our revenue is now directly from readers. Additionally, advertising revenue was 2% ahead of budget.
Our operating profit in 2018 declined during the year, from £21.0m in 2017 to £8.1m in 2018. This performance was entirely expected and operating profit was ahead of budget.