Newsteam Group is planning ‘substantial growth’ in the number of stores it supplies with newspapers and magazines following its most successful year of trading.
The home newspaper delivery giant now makes 450,000 drops per week to nearly 100,000 customers, covering 83% of the UK, up from around 75% last year.
Newly submitted accounts for the year ending 28 December 2024 showed a 15% jump in revenue to £67.7m. As well as acquiring more rounds from newsagents, the period saw an expansion of its deliveries of home essentials to its customers including dairy and paper products.
The report also revealed a major new focus for Newsteam Group with the potential to overhaul the entire newspaper supply chain.
Newsteam Group stated it is ‘confident’ it can ramp up its supply of newspapers and magazines to more stores as they ‘seek to source their supplies directly from Newsteam Group rather than relying on the established wholesale network’, meaning Smiths News and InPost Newstrade.
While Newsteam Group already acts as a ‘sub wholesaler’ by supplying hundreds of stores with newstrade products, a majority of these existing retailers were picked up by Newsteam Group when it acquired other home news deliver agents providing this service. The latest report suggests a more active approach to winning over stores. The company said it is ‘expanding its capabilities’ in preparation for this trend.
Explaining its reasoning, Newsteam Group claimed newspaper distribution is ‘undergoing significant consolidation and transformation’. Newsteam Group managing director Jonathan Kennett told Better Retailing: “Our view is the wholesale network are breakers of bulk with very little bulk left to break as sales decline, in the long-term the newstrade can only afford one network servicing consumers and shop sales combined and we hope to play a significant role.”
The prospect of stores defecting en-mass from being supplied by their traditional news wholesaler would be enough to cause significant financial problems for Smiths News and InPost Newstrade, which depend on carriage charges for a significant share of their revenue.
Newsteam Group’s results also showed decreasing reliance on its direct contracts with publishers to deliver to their subscribers. While revenue from its own delivery services increased by £9.75m year on year, its revenue from direct publisher contracts fell by £741k.
The overall revenue increase came with an even larger operating profit rise, quadrupling from £1.1m in 2023 to £4.25m in 2024. The increase was also driven by improvements at sister company PaperRound including better round mapping tools leading to more drops per van, and a UK headcount reduction from 262 to 214 employees, though RN understands headcount increased at its parent company Suonal.
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