DC Thomson, the Scotland-based publisher of The Beano children’s comic and newspapers including the 275-year-old Aberdeen Press & Journal, the Sunday Post and the Dundee Courier, is to cut 300 (19%) of its workforce and close almost 40 magazines as the economic downturn forces the family-owned company to “reset” the business “to focus on high growth and sustainable growth”. It aims to cut costs by £10m, possibly equivalent to the 2021-22 increased costs of fuel and paper. An estimated 50% of the job losses will come from the closure of Aceville, the Essex-based publisher of more than 20 gardening, health and food magazines which had been acquired for a total of £3m in 2018.
Even at the time of the acquisition, Aceville looked an odd choice for the 118-year-old DC Thomson. But the company described it as “one of the fastest-growing publishing houses in the UK”. It pointed out that the little-known publisher, 60 miles from London, had built impressive magazine sales and digital audiences over its then 15-year history.
It employed 190 people (most of whom began their careers with the company) and was believed to have revenues of almost £25m. DC Thomson said it liked Aceville’s under-the-radar performance because its own success had so often been under-estimated by the London media market 500 miles from its headquarters in Dundee. Nevertheless, DC Thomson’s claim that adding Aceville’s then 40 mostly small magazines made it one of the UK leaders “by number of magazines” was a curious boast. The subsidiary, whose revenue has more than halved to some £10m, has been lossmaking almost since it was acquired.
In addition to Aceville, it is believed that DC Thomson also plans to close at least six magazines published in Dundee including: Platinum, a three-year-old monthly for 55+ women; Shout, for teen girls; and children’s magazines Animals & You and Animal Planet.
The magazine closures represent a significant setback for what is the UK’s oldest media group – and for Dundee. After years of apparent poverty, the city has recently prospered through the emergence of computer games companies (including the creators of Grand Theft Auto). It has also become the first ‘branch’ outside London of the famous Victoria & Albert design museum. It has been tagged “The coolest little city in Britain” by GQ magazine and among “Worldwide Hot Destinations” by the Wall Street Journal.
But all that most Brits can tell you about Dundee is that it once depended on the three Js (jute, jam and journalism). They may know that it “invented” orange marmalade (the jam flavour that Brits traditionally prefer for breakfast) but they are more likely still to know the name of DC Thomson, the city’s largest employer and publisher of Beano and Dandy. In addition to the comics and newspapers, it publishes My Weekly, The Scots Magazine, and the delightfully old-fashioned The People’s Friend. Its young women’s pop magazines once out-sold their high-cost London rivals. In recent times, Thomson has acquired Puzzler Media, the Stylist Group, and the genealogical service Find My Past.
The company’s entrepreneurial roots were in shipping but its media interest began with the acquisition of the Dundee Courier, in 1886, and the creation – in 1905 – of “DC Thomson” after its boss David Couper Thomson. Some long-memory negatives date from the company’s one-time refusal to employ Catholics and its opposition to trade unions. But the muddy episodes have long since been buried by a quiet admiration among media Brits for a (still) print-dominated company with a reputation for taking the long view with media investment.
Plenty of seasoned media executives will tell you that the Thomson family doesn’t panic. They follow their instincts and back good people and ideas even in tough times. And this nicely unfashionable company has managed to thrive during decades of media turmoil everywhere else. Until now.
DC Thomson media revenue was £156mn last year (2021: £146mn), some 50% from circulation. But the total revenue of £174mn (£160mn) includes a dividend income of £17mn which reveals the almost hidden story of a company with an investment portfolio worth almost £900m – much more than the value of its publishing assets.
It invests variously in listed companies, in funds operated by its Dundee neighbour Alliance Trust (in which Thomson itself is a longtime shareholder), and in a clutch of startups that catch the family’s attention. It is this investing which consistently funds a generous annual dividend for family shareholders – £22.2mn in 2022.
In that sense, DC Thomson is more an investment company than a media group. But, over the years, investing in its own and other people’s media has delivered good returns. Perhaps it will again. Once this week’s “reset” is over and the portfolio becomes, well, more digital.
