Strategy and business model

Strategy

The Company’s strategy is focused on excellence in newspaper and magazine wholesaling, with competitive advantage derived from a combination of service quality, scale efficiencies and value for customers. These ‘three essentials’ underpin our partnerships with both publishers and retailers, and enable us to deliver sustainable, and relatively predictable, profit and cash flow.

Market characteristics

We provide a shared route to market for publishers and retailers with a high quality but low unit-cost service, supporting our communities and consumers across the UK.

Our core market and operations are characterised by:

  • high-density, time sensitive distribution
  • a fragmented customer base with wide variability in size and location
  • capability to manage a complex and fast-moving product range
  • a total supply chain service including delivery, returns processing, information management and demand forecasting

This combination of customer and product fragmentation supports the role of an industry specialist and, together with our high levels of efficiency, discourages disintermediation in the supply chain.

Business Model

Underpinning our business model are long term distribution contracts with all of the UK’s major publishers. These provide surety of the territories in which we operate and, due to low volatility of demand, high predictability of future revenues and cash flows.

Our business model acknowledges that sales of newspapers and magazines have been slowly declining for many years. We strive to offset the impact of this decline through a combination of operating efficiencies, increases in cover prices, and index-linked distribution service charges that help to mitigate the impact of variable cost inflation.

To support or operations, we leverage our scale with information systems and support functions that deliver a high-quality service at a lower cost per depot. We take an analytical approach to improvement, measuring performance against transparent KPIs, with a view to raising overall standards. With UK wide operations, we recognise that consistency is key and our strategy focuses on delivering the same high standards at all locations.

Service

Service excellence is at the heart of our business. From timely delivery to returns processing and information services, we provide the expertise and practical know-how that our customers trust to support their business. We have a long-term commitment to investing in systems and infrastructure, which enhance our service and keep us at the forefront of market trends. Delivering great service is also critical to reducing rectification costs, helping to support our goals of efficiency and value.

Scale Efficiency

Our scale supports high-value and cost-effective solutions that help to underpin our competitive advantage. Furthermore, we are committed to continual improvement and unlocking the incremental gains which come from new ways of working. By working across the supply chain, we are able to deliver even greater efficiencies and share these benefits in a way that further enhances our long term partnerships.

Value

Value is critical to our model. As a middleman we aim to deliver the most cost-effective route to market, sharing our infrastructure and capability across many thousands of customers so that each one can benefit. With impressive capability and high market share we can deliver services as standard that would otherwise require a premium.

Our strategy is focused on the three essentials of Service, Scale and Value


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