The Lebedev family first had profit from the UK media business

For the first time, the publishing business in Britain brought banker Alexander Lebedev and his son Yevgenu a net profit, partially caused by the sale of the £24 million i newspaper, created back in 2010 on the basis of The Independent.
18.09.2017
RBC
Origin source
For the fiscal year ended October 2, 2016, the net profit of the London-based Lebedev Holdings Ltd, managing the media business of the Lebedev family in the UK, was almost £ 1.9 million with revenue of £ 103.3 million. This follows from its latest available financial report, with which was familiarized by RBC. The profit was fixed for the first time for all the years of existence of Lebedev Holdings Ltd. In the previous fiscal year ended September 27, 2015, the company's net loss was almost £ 12 million with revenue of £ 127.4 million.

What the Lebedev family owns in Britain

Lebedev Holdings Ltd was registered in December 2008 on the eve of the purchase by Alexander Lebedev of the loss-making newspaper Evening Standard. In January 2009, the main owner of the National Reserve Corporation (the last time Forbes included Lebedev in his rating of "200 richest businessmen of Russia" in 2015 with a fortune of $ 400 million) paid £ 75 million for 75.1%

In May 2010, Lebedev Holdings Ltd became the owner of another British newspaper - The Independent. This edition cost Lebedev a symbolic £ 1. Moreover, the previous owner pledged to transfer to the new owner in the first year £ 9.2 million to support the business in the transition period.

Finally, Lebedev Holdings Ltd is the main owner of a small city TV channel London Live. The license was received in early 2013, the broadcast started in the spring of 2014. Last year, the monthly audience of London Live reached, according to the company itself, 2.5 million viewers.

The entire business is designed for Eugene Lebedev. In the company's materials, he appears not only as director of Lebedev Holdings Ltd, but also as its sole owner. Lebedev Sr. was a member of the company's board of directors until November 2016.

Alexander Lebedev did not answer RBC's questions. With Evgeny Lebedev could not be contacted.

Free more profitable

After the acquisition, Lebedevs reformed the publications he received.

Distributed, as it follows from the name, in the evenings the Evening Standard newspaper traditionally earned including on sale of the circulation: the number cost 50 pence at retail. In October 2009, the new owners abandoned this model - the newspaper became free.

In 2016, the announced circulation of the Evening Standard was 900 thousand copies. Now, in addition to the newspaper itself, on Wednesdays there is also a free Homes & Property app, on Thursdays - the tabloid ES Magazine.

The rate solely on the advertising model and constant control over costs gave its result in 2012. Then for the first time since 2001, the Evening Standard has become an operationally profitable publication. The same was the result and all subsequent years. In particular, in the financial year 2016, as shown by the reporting of the individual company Evening Standard Ltd, for which the business of this newspaper is registered only, its operating profit amounted to almost £ 2.2 million with a revenue of £ 71.2 million. But due to high debt Evening Standard continues to show a net loss of £ 3.3m in fiscal year 2016.

Assets for Sale

Transformations have affected and The Independent. If in Evening Standard paper and Internet versions develop together within the same company, then all Internet projects related to The Independent, as early as autumn 2010, were transferred to a separate company, not formally associated with Lebedev Holdings Ltd. However, its main owner is also Evgeny Lebedev. The Independent newspaper and its Sunday application were also decorated at the "daughter" of Lebedev Holdings Ltd - Independent Print Ltd.

In the fall of 2010, another paper project, i. It, like The Independent, is a paid edition, but the cost of one room is not large, only 20 pence. A new paper edition a few years later allowed the entire Lebedev Holdings Ltd to record the net profit for the first time when in the spring of 2016 i was sold to an outside investor - Johnston Press. £ 24 million generated from the deal exceeded all costs, allowing the holding to show £ 1.9 million in net profit.

What's left

The Lebedevs also refused to release The Independent on paper. In fact, Independent Print Ltd, which is responsible for this division, has ceased operations. And now on the balance sheet of Lebedev Holdings Ltd there were only a relatively successful Evening Standard newspaper and while the operationally unprofitable London Live channel. These assets, excluding the business of The Independent, in the fiscal year 2016, showed £ 0.6 million of operating profit and £ 7.4 million of net loss on revenue of £ 77.4 million. As of October 2, 2016, Lebedev Holdings Ltd total liabilities reached £ 118 million.

At the same time, as already mentioned, Evgeny Lebedev is controlled by another media-related business - the same company that, since autumn 2010, has managed independent.co.uk and indy100.com, as well as a mobile application that has become available to all former subscribers The Independent. This, according to the accounts of this company, is a much more successful project. In fiscal year 2016, its revenue reached £ 14.3 million, operating profit was £ 1.7 million, net profit was £ 1.3 million. The company's obligations as of October 2, 2016 were small - less than £ 0.5 million.

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