Mark Allen Group (MAG), the UK-based B2B, which has increased its revenue by 29% and EBITDA profit by 47% in the past five years, may be facing something of a slowdown after more than a decade of dramatic growth, including throughout the pandemic.
For the year ended 31 March 2023, MAG had revenue of £66.1mn (10% up) and £12.5mn EBITDA (5% down). But, on an organic basis, revenue grew by 7% and profit declined by 8%. By the company’s own standards, that is a significant slowdown.
But the 2023 revenue was 140% ahead of 2015 when the headcount was about half its current level. The company only made £1mn of operating profit for the first time in 2010. In the intervening years, MAG has spent some £60mn on more than 35 acquisitions (many of them print magazines), culminating in the £14mn purchase of the 90-year-old Farners Weekly in 2020, which is now its most profitable brand. Many of the acquisitions – from the likes of RELX, Centaur, Findlay and Haymarket – have had a payback of 2-3 years.
The strategy has been a textbook study in how to build a business by acquiring established (and often very profitable) brands from companies which were sometimes keener to divest their print than to maximise the proceeds. But is the inevitable slowdown of B2B magazine acquisitions creating a challenge for MAG’s future growth?
There is no sign that the family-owned company – chaired by founder and former journalist Mark Allen – intends to divest. But any future valuation could be affected by the revenue profile. That’s where the challenge may be for a business which still generates three-quarters of its revenue from the UK. More pointedly, advertising (most of it in print) accounts for about 40% of revenue, subscriptions for 22% and events for 32%. These revenue shares have hardly shifted in the last five years, and the 2023 results show that digital is only 25% of revenue (it had been 29% two years earlier).
| Mark Allen Group £mn SnapShot | 2023 | 2022 | 2021 | 2020 | 2019 |
| Revenue | 66.1 | 60.0 | 43.7 | 54.6 | 51.3 |
| UK | 76% | 75% | 89% | 79% | 76% |
| International | 24% | 25% | 11% | 21% | 24% |
| Ads | 40% | 44% | 49% | 43% | 35% |
| Subs | 22% | 26% | 34% | 18% | 17% |
| Events | 32% | 25% | 11% | 31% | 39% |
| Costs | 53.6 | 46.9 | 33.5 | 46.2 | 42.8 |
| EBITDA | 12.5 | 13.1 | 10.2 | 8.4 | 8.5 |
| Margin | 19% | 22% | 23% | 15% | 17% |
| People | 477 | 443 | 451 | 473 | 360 |
MAG profit margins in 2023 were 19%, the lowest for four years. Another family-owned, UK-based B2B – the food and drink specialist William Reed – might be a role model for its recent growth in international revenue (now 52% of the total) and profit margins of 24%.
The MAG highlights of what has been one of the UK’s fastest growing B2B media companies are its two largest divisions – Agriculture and Healthcare – which together account for 34% of revenue and almost 40% of EBITDA.
Emphasising MAG’s deal-making flair, Agriculture (primarily Farmers Weekly) has generated profit almost equal to its £14mn acquisition price during the past four years. That’s been a pattern for the 39-year-old MAG, which was bootstrapped from the start by subscriptions revenue and has been able to comfortably fund most of its deals with quickly-repaid, short-term borrowing.
But the latest financials may be a warning that – with decreasing opportunities for easy wins by acquiring print magazines – MAG must find new ways to build its revenue variously from digital, events, subscriptions and from outside the UK.
Nobody should doubt that a publisher which owns some of the UK’s best-known B2B media brands, has been good at generating cash and has consistently invested in high-quality journalism, can regain its growth trajectory. It can – if it commits itself – build more high-value data products and, with it, the ability to increase earnings from digital, subscriptions and international markets.That may call, among other things, for the establishment of data-driven business units – separate from traditional magazine brands. It might even involve trimming a broad portfolio that currently spans aviation, engineering, agriculture, healthcare, veterinary, education, financial services, music, transport and HR.
That may be the next transformation for the Mark Allen Group, something with which to celebrate its 40th anniversary in 2025.
